5.3 - Exchange Rates

Multiple Choice

Which of the following best describes an exchange rate?

• The price of goods in a country

• The value of one nation’s currency compared to another

• The amount of money a country spends on imports

• The interest rate set by a country’s central bank

Multiple Choice

Based on the currency chart, which of the following statements is correct?

• 1 Euro is worth 1.44 dollars

• 1 dollar is worth 0.69 Euros

• 100 dollars is worth 3170 bahts

• 100 francs is worth 86 dollars

Multiple Select

Which of the following are causes of appreciation of the US dollar from the US perspective? (more than 1 correct answer)

• Increased demand for US goods

• Foreign country incomes increase

• Low inflation rates relative to foreign currency

• Higher inflation than foreign country

Multiple Select

Who are considered losers when the US dollar appreciates, according to the US perspective? (more than 1 correct answer)

• Exporters

• Foreign consumers of American goods

• Tourists coming to the US

• American tourists

Multiple Choice

Who would benefit from the depreciation of the Mexican Peso vs. the US Dollar?

• Mexican consumers of American goods

• Mexican consumers of Mexican goods

• US consumers of Mexican goods

• US consumers of US goods

Multiple Choice

When US currency appreciates, the price of foreign goods (for Americans) will ___ .

• fall

• rise

• not enough information

• stay the same

Multiple Choice

Who would be hurt by a strong US Dollar?

• Asian tourists to Europe

• US Exporters

• Tourists going to Europe

• Americans who have a lot of debt

Multiple Choice

What happens to the balance of trade when a nation's currency depreciates?

• it does not change

• it worsens (imports go up while exports go down)

• it depends on what happens to the other nation's currency

• it improves (imports go down while exports go up)

Open Ended

Explain how changes in a nation's currency value can impact its exporters and importers. Use examples from both a strong and a depreciating currency scenario.

Multiple Choice

Why do exchange rates constantly change?

• Because of fluctuations in supply and demand for currencies

• Because exchange rates are fixed by governments

• Because currencies never change in value

• Because only one country controls all exchange rates

Match

Match the following to their due dates

• Check-ins, webquest, article summary and slide

• Test and notebook (vocab and notes)

• Country Project

today (12/8)

tomorrow (12/9)

Thursday

• today (12/8)

• tomorrow (12/9)

• Thursday