Exam 9: The Exchange Rate and the Balance of Payments

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Important factors that change the demand for dollars and shift the demand curve for dollars include which of the following? I. Interest rates around the world. II. The current exchange rate. III. The expected future exchange rate.

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A countryʹs balance of payments accounts records

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If the Peopleʹs Bank of China adopted a flexible exchange rate policy,

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Relative to the yen, from 2007-2009 the U.S. dollar

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A country that borrows more from the rest of the world than it lends to it in a year is called a___________ , and a country that lends more to the rest of the world than it borrows from it in a year is called a___________ .

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If the exchange rate rises from 100 yen per dollar to 120 yen per dollar, the dollar has appreciated.

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If the prices in the United States rise faster than those in other countries,

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Suppose the U.S. interest rate is 6 percent and the world interest rate is 5 percent. The U.S. interest differential is

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If the exchange rate falls from 120 yen per dollar to 110 yen per dollar, the dollar has depreciated.

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When the exchange rate falls, in the foreign exchange market the

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Suppose the market for dollars is in equilibrium, then the expected future exchange rate rises. What effect does this change have on the current exchange rate?

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Explain the effect on the demand for dollars in the foreign exchange market of an increase in the U.S. interest rate differential.

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If there are equal rates of return between assets in two currencies, then there is

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Today, the United States is a I. net borrower II. net lender III. debtor nation IV. creditor nation

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If the exchange rate falls from 120 yen per dollar to 100 yen per dollar, the dollar has_________ and the yen has_________ .

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Which of the following equations represents the private sector balance?

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Which of the following occurrences would NOT shift the demand curve for U.S. dollars in the foreign exchange market?

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ʺCurrency appreciationʺ means the price of the currency is decreasing.

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Which of the following is NOT included in the U.S. current account?

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If a country is currently lending more to the rest of the world than it is borrowing from the rest of the world, the country is a

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