Macro Unit 4 Review

If the U.S. dollar depreciates relative to the Chinese yuan, then

• the supply of U.S. dollars has increased

• the supply of Chinese yuan has increased

• the demand of U.S. dollars has increased

• Prices would not differ for U.S. or Chinese goods

• None of the answers

All of the following would be recorded in the financial account EXCEPT

• An American purchases a $100,000 bond in Canada.

• A Japanese investor buys a hotel in the USA.

• Germans buy furniture from the USA.

• An American investor buys a factory in Ecuador.

• All are included in the financial account

A "strong" dollar hurts

• The British traveling to America

• An American traveling to the United Kingdom

• Businesses that import foreign goods

• The fixed exchange rate

• Competition among foreign competitors

If inflation is higher in India than the United States, then

• the exchange rate will not be affected.

• the value of the U.S. dollar will depreciate.

• the value of the U.S. dollar will appreciate.

• exchange rates will be affected but not the value of the dollar.

• the supply of U.S. dollars in the FOREX will decrease

Which of the following will decrease the supply of U.S. dollars in the foreign exchange market?

• U.S. residents increase their travel abroad

• U.S. consumers demand fewer products from Japan.

• Foreigners increase their demand for U.S. goods

• Foreigners increase their travel to the United States

• Foreign investors see increased investment opportunities in the United States

A higher interest rate in the U.S. rather than in Canada will cause:

• A decrease in the supply of U.S. dollars

• A decrease in the demand for U.S. dollars

• A decrease in the supply of Canadian dollars

• The depreciation of the U.S. dollar

• The appreciation of the Canadian dollar

Which of the following events would cause the U.S. dollar to appreciate relative to the Australian dollar?

• Overseas tourism by Americans increase

• Prices in the U.S. fall relative to Australia

• Increased capital outflow from the U.S. to Australia

• U.S. firms prefer technology products from Australia

• An increase in the unemployment rate in Australia

Assume that someone in the United States sends money to a family member in Portugal. This will be recorded in the _____ as a _____.

• Current account; debit

• Current account; credit

• Financial account; debit

• Financial account; credit

• trade surplus; credit

If the U.S. imports more goods that it exports, it will results in a(n):

• trade surplus

• trade deficit

• financial surplus

• financial deficit

• none of the answers

An increase in American consumers' demand for Mexican chili peppers causes the

I. value of the Mexican peso to increase

II. value of the U.S. dollar to decrease

III. reduction in the U.S. trade deficit

• I only

• III only

• II and III only

• I and II only

• I, II and III