Question 1

In and is exported from the United States exceeded service pours into the United States by 42 billion.

Accepted Answer

A) True 
 B)False

Question 2

Suppose the exchange rate between British pounds (£) and U.S. dollar ($) is $1.35 per pound. What is the correct way to write this pound-dollar exchange rate _____ The dollar-pound exchange rate?

Accepted Answer

The answer of Suppose the exchange rate between British pounds...

Question 3

What exactly are SDRs and what are they for?

Accepted Answer

The answer of What exactly are SDRs and what are...

Question 4

Suppose the pound-dollar exchange rate is now 1.3500. Then the U.S. dollar increases in value by 5 percent. What is the new pound-dollar exchange rate _____ What is the new exchange rate if the U.S. dollar appreciated by 10 percent?

Accepted Answer

The answer of Suppose the pound-dollar exchange rate is now...

Question 5

The Euro fell against the U.S. dollar in international markets, at least during its earliest period of international trading, probably because

Accepted Answer

A) Observers had believed all along that the Euro would not be able to challenge the U.S. dollar for global leadership as an international reserve currency 
B)  Several European economies, including Germany, weakened shortly after the Euro appeared, such that inflation began to gather momentum 
C)  The European Central Bank did not appear to be interested in establishing for itself a strong international leadership position, at least initially 
D)  B and C only 
E)  A, B and C

Question 6

In 2000, the U.S. balance on goods and services deficit stands at about $350 billion.

Accepted Answer

A) True 
 B)False

Question 7

Why was the gold standard developed _____ What problems did it appear to solve and what problems did it create _____ What exactly is the difference between the gold standard and the gold exchange standard?

Accepted Answer

The answer of Why was the gold standard developed _____...

Question 8

Suppose the dollar-Euro spot exchange rate is 0.8620 and the 3 -month forward exchange rate for these two currencies is 0.8315. What then is the percentage discount on Euros slated for delivery in 3 months?

Accepted Answer

The answer of Suppose the dollar-Euro spot exchange rate is...

Question 9

If the pound-dollar exchange rate is 1.4000 and the pound declines 10 percent in value, what is the new pound-dollar exchange rate?

Accepted Answer

The answer of If the pound-dollar exchange rate is 1.4000...

Question 10

When and where was the so-called modified exchange standard created _____ Explain how this

Accepted Answer

The answer of When and where was the so-called modified...

Question 11

What is a buying hedge in currency futures _____ A selling hedge _____ Under what circumstances is each of these hedges likely to be employed?

Accepted Answer

The answer of What is a buying hedge in currency...

Exam 23: International Transactions and Currency Values