Exam 13: Savings, Capital Formation and Comparative Economic Growth

The currency used in the Duchy of Saxony is the ducet.The demand for the Saxonian ducet in the foreign exchange market equals 12,000 - 3,000e and the supply of ducets in the foreign exchange market equals 2,000 + 2,000e,where e is the nominal exchange rate expressed in dollars per ducet.The market equilibrium value of the ducet is _________ ducets per dollar or _________ dollars per ducet.

The Canadian dollar-yen exchange rate,e,where e is the nominal exchange rate expressed as Japanese yen per dollar,will depreciate when

The principal supplier(s)of Canadian dollars to the foreign exchange market is/are

The net increase in a country's stock of international reserves over a year is called a(n)

For given domestic and foreign price levels,a decrease in the nominal exchange rate __________ the real exchange rate.

-Refer to the diagram above.A decrease in the supply of dollars will result in

When the nominal exchange decreases from 10.67 pesos per dollar to 10.60 pesos per dollar,the dollar has

Nations can use ____________ to restrict foreign exchange transactions and maintain the official value of their currency.

For a given nominal exchange rate and foreign price level,an increase in the domestic price level __________ the real exchange rate.

-Refer to the diagram above.If more people in Canada decide to purchase Japanese cars,what effect will this have on the market for dollars?

The figure below shows the U.S.dollar-Canadian dollar nominal exchange rate from January 1971 to March 2008. -From January 1993 to January 2003,the Canadian dollar __________;by the end of the period,it was worth approximately ___________ than at the beginning.

The currency used in the Duchy of Saxony is the ducet.If the market equilibrium value of the exchange rate equals $1.40 per ducet,but the ducet is officially fixed at $1.50 per ducet,then the ducet exchange rate is __________ and,to maintain this exchange rate,there will be __________ in the government's stock of international reserves.

Policy-makers are ___________ using monetary policy to stabilize the economy when there is a fixed exchange rate.

The currency used in the Duchy of Saxony is the ducet.The demand for the Saxonian ducet in the foreign exchange market equals 14,000 - 3,000e and the supply of ducets in the foreign exchange market equals 2,000 + 2,000e,where e is the nominal exchange rate expressed in dollars per ducet.If the ducet is fixed at $3 per ducet,then to maintain this fixed rate the Duchy of Saxony's international reserves must ____________ ducets per period.

-Refer to the diagram above.If the European economy experiences a recession and the Canadian economy does not,then these events will cause the

A decrease in the value of a currency relative to other currencies is called a(n)

Proponents of fixed exchange rates argue that the predictability of the fixed exchange rate

An increase in the real exchange rate will tend to _________ exports and ___________ imports.

The price of gold is 300 U.S.dollars per ounce in New York and 435 Canadian dollars per ounce in Toronto.If the law of one price holds for gold,the nominal exchange rate is __________ Canadian dollars per U.S.dollar.

The law of one price states that if transportation costs are relatively small,then the