Exam 9: The Exchange Rate and the Balance of Payments

The sum of the current, capital and official settlements accounts is always zero.

-In the above figure, suppose the economy is initially at point A. People come to expect the future U.S. exchange rate to be lower. As a result, there is a change from point A to a point such as ________.

If the Japanese yen was 123 per dollar and now it is 114 yen per dollar, it can be said that

-In the figure above, the shift in the demand curve for U.S. dollars from D? to D? could occur when

A small country is an international borrower and its domestic demand for loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international borrowing ________.

In the foreign exchange market, if the demand for dollars permanently decreases, the Fed can maintain the exchange rate at its old equilibrium level indefinitely by buying dollars.

The demand for dollars in the foreign exchange market will decrease and hence the demand curve for dollars will shift leftward if

If we import more than we export from the rest of the world we

If the Fed raises the interest rate, in the foreign exchange market the demand for the U.S. dollar increases.

If the dollar's value changes from 120 yen per dollar to 110 yen per dollar, the dollar has

When a nation has no funds to finance economic development, how can it acquire the needed funds? Is the country a net lender or a net borrower?

If the government sector is running a deficit of $120 million and the private sector is running a surplus of $200 million, then net exports equal

The main item in the current account balance is

Which of the following creates a demand for U.S. dollars?

When people who are holding the money of some other country want to exchange it for U.S. dollars, they ________ U.S. dollars and ________ that other country's money.

-The table above shows the exchange rates between various currencies and the U.S. dollar. Between 2015 and 2016, the Euro ________ against the U.S. dollar, the U.S. dollar ________ against the Japanese yen and the U.S. dollar ________ against the Canadian dollar

If people expect the dollar to depreciate, then the

If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is

If the Fed wants to depreciate the U.S. dollar against the British pound, it will ________.

When the U.S. interest rate rises relative to that in other counties, in the foreign exchange market the demand for U.S. dollars ________ and the supply of U.S. dollars ________.