Unit #4 Standard #3

What is a decrease in the value of a currency?

• appreciation

• depreciation

• exchange rate

• inflation

What is the value of a nations currency in relation to a foreign country?

• Trade Deficit

• Foreign Exchange Market

• Exchange Rate

• Trade Surplus

What is the increase in the value of a currency?

• Exchange Rate

• Recession

• Absolute Advantage

• Appreciation

What does it mean when an economist says a currency is stronger?

• It can be exchanged for more of a lesser foreign currency

• It can be converted to prices in any currency

• There are few things it could buy

• It will buy fewer foreign goods

The exchange rate between 2 countries is determined by,

• Supply and Demand

• Inflation/Interest Rates

• Balance Trade

• Fixed Percentage

If the US $ were to appreciate in relation to the Euro, what effect would this have?

• European consumers would have more purchasing power in US

• US consumers can buy more European goods and services for fewer $$

• US consumers can buy more English goods and services for fewer $$

• European tourists to the US will spend more $$

If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?

• Mexico has less purchasing power in Chinese currency

• Mexico benefits from increased purchasing power

• Mexico would have more Chinese investors

• They would be invaded by China

When the US$ exchange rate falls it will usually

• help to reduce a US trade deficit.

• increase the foreign price of US exports.

• reduce the price of US imports.

• reduce US inflation

Currency appreciation results in

• Increased exports, increased imports

• Decreased exports, decreased imports

• Increased exports, decreased imports

• Decreased exports, increased imports

Currency depreciation results in

• Increased exports, increased imports

• Decreased exports, decreased imports

• Increased exports, decreased imports

• Decreased exports, increased imports