The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market.Assume that the market operates under a flexible exchange rate regime. Figure 22.1 In the figure: D1 and D2: Demand for Brazilian reals S1 and S2: Supply of Brazilian reals Refer to Figure 22.1.If the initial equilibrium exchange rate is 6 pesos per real, then other things equal, a decrease in the number of Brazilian tourists to Mexico would:

A) increase the demand for Brazilian reals from D2 to D1 and increase the exchange rate to 8 pesos per real. B) decrease the supply of Brazilian reals from S1 to S2 and increase the exchange rate to 8 pesos per real. C) decrease the supply of Brazilian reals from S1 to S2 and increase the exchange rate to 10 pesos per real. D) decrease the demand for Brazilian reals from D1 to D2 and increase the exchange rate to 8 pesos per real. E) decrease the supply of Brazilian reals from S1 to S2 and increase the demand for Brazilian reals from D2 to D1, thereby changing the exchanging rate to 10 pesos per real. A) increase the demand for Brazilian reals from D2 to D1 and increase the exchange rate to 8 pesos per real. B) decrease the supply of Brazilian reals from S1 to S2 and increase the exchange rate to 8 pesos per real. C) decrease the supply of Brazilian reals from S1 to S2 and increase the exchange rate to 10 pesos per real. D) decrease the demand for Brazilian reals from D1 to D2 and increase the exchange rate to 8 pesos per real. E) decrease the supply of Brazilian reals from S1 to S2 and increase the demand for Brazilian reals from D2 to D1, thereby changing the exchanging rate to 10 pesos per real.

The figure given below depicts the foreign exchange market for British pounds traded for U.S.dollars. Figure 22.2 Refer to Figure 22.2.Suppose S1 is the initial supply curve and the British demand for U.S.manufactured computers decreases.Then, with flexible exchange rates:

A) the price per British pound decreases by $0.10 and the quantity of British pounds increases by 50. B) the price per British pound decreases by $0.10 and the quantity of British pounds decreases by 50. C) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 50. D) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 75. E) the price per British pound and the quantity of British pounds remain unchanged. A) the price per British pound decreases by $0.10 and the quantity of British pounds increases by 50. B) the price per British pound decreases by $0.10 and the quantity of British pounds decreases by 50. C) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 50. D) the price per British pound increases by $0.15 and the quantity of British pounds decreases by 75. E) the price per British pound and the quantity of British pounds remain unchanged.

Exam 42: Exchange Rates and Financial Links Between Countries

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Suppose you are a U.S.exporter expecting to receive a payment of NZD1, 000 (New Zealand dollars)in 12 months.The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent.If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?

(Multiple Choice)

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Question 41

An appreciation of the Norwegian kroner in relation to the U.S.dollar is most likely to cause:

(Multiple Choice)

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Question 42

A decrease in the price of a currency in terms of another under a flexible exchange rate regimeis called:

(Multiple Choice)

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Question 43

If the official gold value of the Australian dollar changes from 470 Australian dollars per ounce to 493 Australian dollars per ounce, we can say that the Australian dollar has appreciated in value.

(True/False)

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Question 44

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market.Assume that the market operates under a flexible exchange rate regime. Figure 22.1 In the figure: D₁ and D₂: Demand for Brazilian reals S₁ and S₂: Supply of Brazilian reals Refer to Figure 22.1.If the initial equilibrium exchange rate is 6 pesos per real, then other things equal, a decrease in the number of Brazilian tourists to Mexico would:

(Multiple Choice)

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Question 45

Appreciation of the dollar means that now it takes more dollars to buy one unit of foreign currency.

(True/False)

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Question 46

Suppose a U.S.citizen purchases a one-year Norwegian bond that yields 10 percent interest.Between the purchase date and the maturity date, the exchange rate changes from to How much was initially invested in the bond if the dollar value of the proceeds at maturity is $3, 500? (roundoff up to the nearest whole number)

(Multiple Choice)

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Question 47

Under a fixed exchange-rate system, in order to maintain the exchange rate:

(Multiple Choice)

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Question 48

Suppose a hefty rise in the demand for Mexican pesos create a chronic shortage of this currency in the foreign exchange market.Which of the following steps should be adopted by the Mexican government to eliminate this shortage?

(Multiple Choice)

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Question 49

Assume that a country's government influences the exchange rate through active central bank intervention, with no pre-announced path.This policy is known as a(n):

(Multiple Choice)

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Question 50

How many U.S.dollars does a U.S.importer need to pay for 100, 000 yen worth of stereo equipment when the price of 1 yen is $0.008?

(Multiple Choice)

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Question 51

If the euro per dollar exchange rate changes from $1 = 0.8 euros to $1 = 0.7 euros, it implies that the euro has depreciated against the dollar.

(True/False)

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Question 52

In effect, during the period immediately following World War II, the world was on a(n):

(Multiple Choice)

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Question 53

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market.Assume that the market operates under a flexible exchange rate regime. Figure 22.1 In the figure: D₁ and D₂: Demand for Brazilian reals S₁ and S₂: Supply of Brazilian reals Refer to Figure 22.1.The demand curves shown for Brazilian reals are based on:

(Multiple Choice)

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Question 54

Suppose that the price of an ounce of gold is 120 pesos in Mexico and 2, 400 yen in Japan.Then the Japanese yen is worth two hundred times the value of a Mexican peso.

(True/False)

4.8/5

(47)

Question 55

The figure given below depicts the foreign exchange market for British pounds traded for U.S.dollars. Figure 22.2 Refer to Figure 22.2.Suppose S₁ is the initial supply curve and the British demand for U.S.manufactured computers decreases.Then, with flexible exchange rates:

(Multiple Choice)

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Question 56

An upward-sloping supply curve of Korean won in terms of Canadian dollars indicates that:

(Multiple Choice)

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Question 57

Assume a U.S.firm invests $1, 500 to buy a one-year U.K.bond.What is the dollar value of the proceeds if the dollar return on the U.K.bond is 20 percent at maturity?

(Multiple Choice)

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Question 58

Suppose the price of an ounce of silver is 100 nuevos soles in Peru and $400 in the United States.This implies:

(Multiple Choice)

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Question 59

World Bank funds are largely acquired through interest earned on the deposits of member nations.

(True/False)

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Question 60

Showing 41 - 60 of 132

Exam 42: Exchange Rates and Financial Links Between Countries

An appreciation of the Norwegian kroner in relation to the U.S.dollar is most likely to cause:

A decrease in the price of a currency in terms of another under a flexible exchange rate regimeis called:

If the official gold value of the Australian dollar changes from 470 Australian dollars per ounce to 493 Australian dollars per ounce, we can say that the Australian dollar has appreciated in value.

Appreciation of the dollar means that now it takes more dollars to buy one unit of foreign currency.

Under a fixed exchange-rate system, in order to maintain the exchange rate:

Suppose a hefty rise in the demand for Mexican pesos create a chronic shortage of this currency in the foreign exchange market.Which of the following steps should be adopted by the Mexican government to eliminate this shortage?

Assume that a country's government influences the exchange rate through active central bank intervention, with no pre-announced path.This policy is known as a(n):

How many U.S.dollars does a U.S.importer need to pay for 100, 000 yen worth of stereo equipment when the price of 1 yen is $0.008?

If the euro per dollar exchange rate changes from $1 = 0.8 euros to $1 = 0.7 euros, it implies that the euro has depreciated against the dollar.

In effect, during the period immediately following World War II, the world was on a(n):

Suppose that the price of an ounce of gold is 120 pesos in Mexico and 2, 400 yen in Japan.Then the Japanese yen is worth two hundred times the value of a Mexican peso.

The figure given below depicts the foreign exchange market for British pounds traded for U.S.dollars. Figure 22.2 Refer to Figure 22.2.Suppose S1 is the initial supply curve and the British demand for U.S.manufactured computers decreases.Then, with flexible exchange rates:

An upward-sloping supply curve of Korean won in terms of Canadian dollars indicates that:

Assume a U.S.firm invests $1, 500 to buy a one-year U.K.bond.What is the dollar value of the proceeds if the dollar return on the U.K.bond is 20 percent at maturity?

Suppose the price of an ounce of silver is 100 nuevos soles in Peru and $400 in the United States.This implies:

World Bank funds are largely acquired through interest earned on the deposits of member nations.

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure given below depicts the foreign exchange market for British pounds traded for U.S.dollars. Figure 22.2 Refer to Figure 22.2.Suppose S₁ is the initial supply curve and the British demand for U.S.manufactured computers decreases.Then, with flexible exchange rates: