Exam 9: The Exchange Rate and the Balance of Payments

Net exports equals

In the long run, the nominal exchange rate

If the current account balance is - $100 billion and the capital account balance is $80 billion, then the official settlement account balance is

With everything else the same, which of the following would increase the demand for U.S. dollars i foreign exchange market? I. a rise in the U.S. interest rate II. a fall in interest rates in foreign countries III. a rise in the expected future exchange rate

In 2007, Japan reported that its overseas assets totalled more than $4.6 trillion. This implies that Japan

-The data in the table above are the U.S. balance of payments. What is the capital account balance?

A country's balance of payments accounts include all of the following EXCEPT

When Safeway supermarkets in the United States buys strawberries from Mexico,

A rise in the U.S. exchange rate will

What are the main components of the current account? What has been the recent U.S. experience with these items?

Suppose the target exchange rate set by the Fed is 100 yen per dollar. If the demand for dollars temporarily increases, to maintain the target exchange rate, the Fed can

In the foreign exchange market, which of the following results in a movement along the supply curve of dollars?

-The figure above shows the demand and supply of dollars in the foreign exchange market. At a price of 2.40 Brazilian reals per dollar,

-Using the table above, if the current market value of the dollar is 70 francs,

In October 2008, Iceland's central bank increased its lending rate to 18% in an "effort to prop up the country's frozen currency and markets.

If the U.S. Federal Reserve increases interest rates,

Suppose $1 will buy 150 yen in January and 200 yen in December. This change could have occurred if the

A country's balance of payments accounts record

When people who are holding the money of some other country want to exchange it for U.S. dollars, they U.S. dollars and _ that other country's money.

If the current account has a negative balance of $100 and the capital account has a positive balance of $80, there will be _ _ in official reserves of _ _.