AP Macro Graph Practice: Foreign Exchange

Each of the following is a demand for Foreign Exchange graphs except

• change in tastes.

• change in relative incomes (wealth effects).

• a change in relative interest rates.

• a change in relative prices (inflation or deflation).

• default risk.

The graph shows a(n)

• depreciation of the dollar and appreciation of the Euro.

• appreciation of the dollar and depreciation of the Euro.

• appreciation of the dollar and appreciation of the Euro.

• depreciation of the dollar and depreciation of the Euro.

The shift in the graph could be caused by

• an increase in the Supply of Euros.

• an increase in the Demand for Euros.

• a decrease in the Supply of Euros.

• the crowding out effect.

The shift in the graph could be caused by

• an increase in the Supply of dollars.

• deflation in Europe.

• people in Europe become wealthier.

• inflation in the US.

• European companies launch new popular products.

The shift in the graph could be caused by

• interest rates rising in Mexico.

• an increase in American tariffs.

• speculators demanding more pesos.

• the launch of a popular product by an American company.

• inflation in the US.

All of the following could cause the shift in the graphs for the Japanese Yen and US Dollar except:

• an increase in interest rates in the US.

• the release of hot new video game console by Japanese producer Nintendo.

• speculators desiring Japanese currency.

• inflation in the US.

• an increase in GDP in the US.

What could cause the shift in the graphs for the Japanese Yen and US Dollar?

• deflation in the US.

• inflation in Japan.

• Japanese company Sony creates a holographic TV system.

• a decrease in Japenese interest rates.

• an increase in the Japanese GDP.

The shift in the graph would cause

• a US trade deficit.

• an increase in American tariffs.

• speculators demanding more pesos.

• an appreciation of the dollar.

• inflation in the US.

An increase in interest rates in the US would cause

• D for the $ to increase and D for the Real to increase

• D for the $ to increase and S for the Real to increase.

• S for the $ to increase and D for the Real to increase.

• S for the $ to increase and S for the Real to increase.

A recession in the US would cause

• D for the $ to increase and D for the Real to increase

• D for the $ to increase and S for the Real to increase.

• S for the $ to increase and D for the Real to increase.

• S for the $ to increase and S for the Real to increase.