Exam 42: Exchange Rates and Financial Links Between Countries

Suppose you observe that with a given supply curve, the Peruvian demand for Argentinean pesos steadily decreases.This will most likely mean:

A reserve currency is a currency that is:

If the price of an ounce of gold is 200 ZARs in South Africa and $75 in Canada, what will be the South African Rand (ZAR)per Canadian dollar (C$)exchange rate?

How many dollars do you need to buy a Swedish Kronor (SEK)when the exchange rate is $1 = 6.429 SEK?

Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?

Foreign exchange market intervention is most effective when:

If prices rise within a country, then, other things equal, the value of a unit of domestic currency will:

The U.S.provides about _____ percent of the annual membership fees of IMF member countries.

Countries that maintain a constant gold value for their currencies are said to be on a gold standard.

Assume that a Chrysler automobile sells for $15, 000 in the United States and that the exchange rate is $1 = €1.3.For purchasing power parity to hold, the same car should sell in Germany for:

A fixed exchange rate can be an equilibrium rate even if there is a permanent shift in the foreign exchange market supply and demand curves.

Currency speculators are traders who seek to profit from a(n):

Purchasing power parity exists when domestic currency:

Under the flexible exchange rate system, when a country tries to stimulate economic growth and improve its employment rates, it is likely to cause:

When a U.S.importer needs $20, 000 to settle an invoice for 228, 000 Uruguayan pesos, the price of 1 dollar is 11.4 Uruguayan pesos.

Fixed exchange rates require the economic policies of countries linked by the exchange rate to be:

Carlos Silva, a Colombian singer, goes on tour to the United States for one month, following high American demand for his live shows.Assuming that all the show's expenses are paid by the U.S.promoters, other things equal, the U.S.tour will bring about:

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.At the initial equilibrium point, with demand curve D and supply curve S₁:

Suppose a 10-mile taxi ride costs £6.50 in London and $10.00 in Los Angeles.If the exchange rate is £1 = $1.70 purchasing power parity holds.

A country on a gold standard was able to maintain people's confidence in the value of its currency by: