Exam 9: The Exchange Rate and the Balance of Payments

Item Amount (billions of dollars) Investment 1,900 Saving 1,600 Government expenditure 1,000 Net taxes 1,700 -The table above gives some of the accounts of the United States in 2020. a) What is the private sector balance? b) What is the government sector balance? c) What is net exports?

In 2007, the U.S. sold $73 million of cigarettes to Iran. Iran paid for these cigarettes using

Suppose the exchange rate for the U.S. dollar falls. This could be caused by

If the value of a dollar rises in terms of yen, the dollar has_________ and the yen has_________ .

Over a month in late 2008, the Federal Reserve Bank reduced the interest rate by 1 percentage point. Given that the United States operates under a _________exchange rate regimes, the primary purpose of these changes was________ exchange rate of each currency.

In the market for international loans, most countries, including the United States, are net borrowers.

-The above figure shows the demand curve for dollars in the yen/dollar exchange market. A movement from point A to point B means that the

An official settlements account balance of -$5,000 means

Item Billions of dollars Exp orts of goods and services, X Imports of goods and services, M 1,000 Net taxes, T Government exp enditure, G 1,300 Saving, S Investment, I 650 -Using the data in the above table, if exports = $1,150 billion and the private sector runs a surplus of $300 billion, the government sector will run

The account that records changes in the U.S. governmentʹs holdings of foreign currency is the

An increase in the U.S. demand for imports will __________the supply of dollars and lead the dollar to __________.

Investor Expected future value of a dollar (francs per doll ar) Investor A 120 Investor B 100 Investor C 85 -Using the table above, if the current market value of the dollar is 70 francs,

Component Amount (billions of dollars) Investment ,I 700 Net taxes, T 1,300 Government expenditure , 1,200 G Exports, X 1,500 Imports ,M 1,700 -In the above table, net exports equals a

ʺAlthough the United States is running a large current account deficit, it is still ranked as a major international net lender.ʺ Is the previous statement correct or incorrect? Briefly explain your answer.

-Using the above figure, an increase in the demand for Dutch goods by U. S. consumers will lead to

If a country during its entire history has invested more in the rest of the world than the rest of the world has invested in it, the country is a

As the value of U.S. exports_________ , the quantity of _________demanded increases.

If the exchange rate is higher than the Fedʹs target exchange rate, the Fed would

Which of the following examples definitely illustrates a depreciation of the U.S. dollar?

Exports of U.S. goods creates a _________U.S. dollars and creates a _________foreign currencies.