Exam 15: Exchange Rates II: the Asset Approach in the Short Run

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Given expectations of future exchange rates, when foreign returns are greater than domestic returns, investors will __ domestic assets, _ domestic currency, foreign currency, and ___ foreign assets.

(Multiple Choice)

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Question 41

Nominal anchors limit overshooting by:

(Multiple Choice)

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Question 42

In the money market, equilibrium is achieved:

(Multiple Choice)

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Question 43

Equilibrium, in the short run, is achieved when:

(Multiple Choice)

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Question 44

When PPP does not hold in the short run, economists have developed an alternative short-run explanatory theory based on the idea that:

(Multiple Choice)

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Question 45

What happened to the measure of money, M0, which includes only cash, bank reserves, and deposits at the Federal Reserve during the crisis?

(Multiple Choice)

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Question 46

When there is a permanent fall in the domestic money supply, the exchange rate:

(Multiple Choice)

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Question 47

When exchange rates are not in alignment, traders see opportunities for _, which move the rates _ equilibrium.

(Multiple Choice)

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Question 48

In the United States, where there is a permanent increase in the money supply, exchange rate overshooting is caused in part by:

(Multiple Choice)

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Question 49

The demand for real money balances is a function of:

(Multiple Choice)

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Question 50

Interest rates set by the European central bank during the period 1999-2004 resulted in what situation compared with the United States?

(Multiple Choice)

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Question 51

When the exchange rate depreciates in the short run and then appreciates to its original level in the long run, it implies that the foreign money supply has:

(Multiple Choice)

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Question 52

In the short run, ceteris paribus, an expanded money supply leads to:

(Multiple Choice)

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Question 53

If the Bank of Japan permanently increases its money supply, then which of the following is most likely to take place in the short run?

(Multiple Choice)

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Question 54

An increase in the money supply in the short run changes , whereas in the long run, change.

(Multiple Choice)

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Question 55

Survey evidence from forex traders indicates support for the economic fundamental's impact on exchange rates:

(Multiple Choice)

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Question 56

Central banks control exchange rates by intervention. If a nation such as Japan wished to peg its market rate at a certain level, such as ¥100 = $1, what should it do if the actual market rate begins to depreciate to ¥125 = $1?

(Multiple Choice)

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Question 57

Which of the following are explanations for sticky prices?

(Multiple Choice)

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Question 58

What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?

(Multiple Choice)

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Question 59

Aggressive policy measures taken by the monetary authority during the 2007-08 financial crisis in the United States resulted in:

(Multiple Choice)

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Question 60

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Exam 15: Exchange Rates II: the Asset Approach in the Short Run

Given expectations of future exchange rates, when foreign returns are greater than domestic returns, investors will ____ domestic assets, _____ domestic currency, ____ foreign currency, and _____ foreign assets.

Nominal anchors limit overshooting by:

In the money market, equilibrium is achieved:

Equilibrium, in the short run, is achieved when:

When PPP does not hold in the short run, economists have developed an alternative short-run explanatory theory based on the idea that:

What happened to the measure of money, M0, which includes only cash, bank reserves, and deposits at the Federal Reserve during the crisis?

When there is a permanent fall in the domestic money supply, the exchange rate:

When exchange rates are not in alignment, traders see opportunities for _____, which move the rates _____ equilibrium.

In the United States, where there is a permanent increase in the money supply, exchange rate overshooting is caused in part by:

The demand for real money balances is a function of:

Interest rates set by the European central bank during the period 1999-2004 resulted in what situation compared with the United States?

When the exchange rate depreciates in the short run and then appreciates to its original level in the long run, it implies that the foreign money supply has:

In the short run, ceteris paribus, an expanded money supply leads to:

If the Bank of Japan permanently increases its money supply, then which of the following is most likely to take place in the short run?

An increase in the money supply in the short run changes ____, whereas in the long run, ____ change.

Survey evidence from forex traders indicates support for the economic fundamental's impact on exchange rates:

Central banks control exchange rates by intervention. If a nation such as Japan wished to peg its market rate at a certain level, such as ¥100 = $1, what should it do if the actual market rate begins to depreciate to ¥125 = $1?

Which of the following are explanations for sticky prices?

What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?

Aggressive policy measures taken by the monetary authority during the 2007-08 financial crisis in the United States resulted in:

Trade in the Global Economy

Trade and Technology: The Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Fixed Versus Floating: International Monetary Experience

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

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Given expectations of future exchange rates, when foreign returns are greater than domestic returns, investors will __ domestic assets, _ domestic currency, foreign currency, and ___ foreign assets.

When exchange rates are not in alignment, traders see opportunities for _, which move the rates _ equilibrium.

An increase in the money supply in the short run changes , whereas in the long run, change.