Câu 22 When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per pound, then, holding everything else constant, the pound has ________ and ________ expensive.

C) depreciated; American wheat sold in Britain becomes more

A) appreciated; British cars sold in the United States become more

B) appreciated; British cars sold in the United States become less

D) depreciated; American wheat sold in Britain becomes less

Câu 23 If the dollar depreciates relative to the Swiss franc.

C) Swiss chocolate will become more expensive in the United States.

A) Swiss chocolate will become cheaper in the United States.

B) American computers will become more expensive in Switzerland.

D) Swiss computers will become cheaper in the United States.

Câu 28 The ________ states that exchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries.

A) theory of purchasing power parity

Câu 31 The theory of PPP suggests that if one country's price level falls relative to another's, its currency should

C) appreciate in the short run.

D) depreciate in the short run.

Câu 32 The theory of purchasing power parity cannot fully explain exchange rate movements in the short run because

C) some goods are not traded between countries.

A) all goods are identical even if produced in different countries.

B) monetary policy differs across countries.

D) fiscal policy differs across countries.

Câu 33 The theory of purchasing power parity states that exchange rates between any two currencies will adjust to reflect changes in

D) the price levels of the two countries.

A) the trade balances of the two countries.

B) the current account balances of the two countries.

C) fiscal policies of the two countries.

Câu 36 The theory of PPP suggests that if one country's price level rises relative to another's, its currency should

C) depreciate in the short run.

D) appreciate in the short run.

Câu 39 vAssume that the following are the predicted inflation rates in these countries for the year: 2% for the United States, 3% for Canada; 4% for Mexico, and 5% for Brazil. According to the purchasing power parity and everything else held constant, which of the following would we expect to happen?

A) The Brazilian real will depreciate against the U.S. dollar.

B) The Mexican peso will depreciate against the Brazilian real.

C) The Canadian dollar will depreciate against the Mexican peso.

D) The U.S. dollar will depreciate against the Canadian dollar.

Câu 40 According to the purchasing power parity theory, a rise in the United States price level of 5 percent, and a rise in the Mexican price level of 6 percent cause

A) the dollar to appreciate 1 percent relative to the peso.

B) the dollar to depreciate 1 percent relative to the peso.

C) the dollar to depreciate 5 percent relative to the peso.

D) the dollar to appreciate 5 percent relative to the peso.

Câu 49 If, in retaliation for "unfair" trade practices, Congress imposes a 30 percent tariff on Japanese DVD recorders, but at the same time, U.S. demand for Japanese goods increases, then, in the long run, ________, everything else held constant.

D) the Japanese yen could appreciate, depreciate or remain constant relative to the U.S. dollar

A) the Japanese yen should appreciate relative to the U.S. dollar

B) the Japanese yen should depreciate relative to the U.S. dollar

C) there is no effect on the Japanese yen relative to the U.S. dollar

Câu 50 If the U.S. Congress imposes a quota on imports of Japanese cars due to claims of "unfair" trade practices, and Japanese demand for American exports increases at the same time, then, in the long run ________, everything else held constant.

B) the Japanese yen will depreciate relative to the U.S. dollar

A) the Japanese yen will appreciate relative to the U.S. dollar

C) the Japanese yen will either appreciate, depreciate or remain constant against the U.S. dollar

D) there will be no effect on the Japanese yen relative to the U.S. dollar

Câu 51 If the inflation rate in the United States is higher than that in Mexico and productivity is growing at a slower rate in the United States than in Mexico, then, in the long run, ________, everything else held constant.

A) the Mexican peso will appreciate relative to the U.S. dollar

B) the Mexican peso will depreciate relative to the U.S. dollar

C) the Mexican peso will either appreciate, depreciate, or remain constant relative to the U.S. dollar

D) there will be no effect on the Mexican peso relative to the U.S. dollar

chương 8

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C) forward exchange rate.

D) fixed exchange rate.

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chương 8

119 questions

Câu 1 The exchange rate is

Câu 2 Exchange rates are determined in

Câu 3 Although foreign exchange market trades are said to involve the buying and selling of currencies, most trades involve the buying and selling of

Câu 4 The immediate (two-day) exchange of one currency for another is a

Câu 5 An agreement to exchange dollar bank deposits for euro bank deposits in one month is a

Câu 6 Today 1 euro can be purchased for $1.10. This is the

Câu 7 In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the

Câu 8 When the value of the British pound changes from $1.25 to $1.50, the pound has and the U.S. dollar has .

Câu 9 When the value of the British pound changes from $1.50 to $1.25, then the pound has and the U.S. dollar has .

Câu 10 When the value of the dollar changes from £0.5 to £0.75, then the British pound has and the U.S. dollar has .

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chương 8

119 questions

Câu 1 The exchange rate is

Câu 2 Exchange rates are determined in

Câu 3 Although foreign exchange market trades are said to involve the buying and selling of currencies, most trades involve the buying and selling of

Câu 4 The immediate (two-day) exchange of one currency for another is a

Câu 5 An agreement to exchange dollar bank deposits for euro bank deposits in one month is a

Câu 6 Today 1 euro can be purchased for $1.10. This is the

Câu 7 In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the

Câu 8 When the value of the British pound changes from $1.25 to $1.50, the pound has ________ and the U.S. dollar has ________.

Câu 9 When the value of the British pound changes from $1.50 to $1.25, then the pound has ________ and the U.S. dollar has ________.

Câu 10 When the value of the dollar changes from £0.5 to £0.75, then the British pound has ________ and the U.S. dollar has ________.

Create a free account and access millions of resources

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for History

Câu 8 When the value of the British pound changes from $1.25 to $1.50, the pound has and the U.S. dollar has .

Câu 9 When the value of the British pound changes from $1.50 to $1.25, then the pound has and the U.S. dollar has .

Câu 10 When the value of the dollar changes from £0.5 to £0.75, then the British pound has and the U.S. dollar has .