Question 1

On June 3,2005,it cost 1.22 U.S.dollars to buy one euro.How many euros did it take to buy one U.S.dollar?

Accepted Answer

A)  0.82 euros 
B)  0.88 euros 
C)  1.22 euros 
D)  88 euros 
A)  0.82 euros 
B)  0.88 euros 
C)  1.22 euros 
D)  88 euros

Question 2

Figure 19-1  
-Of the graphs in Figure 19-1,which one shows the effects of an increase in interest rates in Japan and a depreciation of the dollar?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 3

If inflation in the United States is higher than in Japan,what will happen to the exchange rate between the U.S.dollar and the Japanese yen?

Accepted Answer

A)  The dollar and yen will both depreciate. 
B)  The dollar and yen will both appreciate. 
C)  The dollar will depreciate and the yen will appreciate. 
D)  The dollar will appreciate and the yen will depreciate. 
A)  The dollar and yen will both depreciate. 
B)  The dollar and yen will both appreciate. 
C)  The dollar will depreciate and the yen will appreciate. 
D)  The dollar will appreciate and the yen will depreciate.

Question 4

It presently costs 50 Canadian dollars for a lift ticket at Whistler Ski Resort in British Columbia.If the current value of the Canadian dollar is 0.68 U.S.dollars,how many U.S.dollars does it cost to ski at Whistler?

Accepted Answer

A)  $16.00 
B)  $34.00 
C)  $73.50 
D)  $156.25 
A)  $16.00 
B)  $34.00 
C)  $73.50 
D)  $156.25

Question 5

If Americans decide to buy more South African diamonds,what is the effect in the foreign market?

Accepted Answer

A)  It will increase demand for U.S.dollars. 
B)  It will decrease demand for U.S.dollars. 
C)  It will increase supply of U.S.dollars. 
D)  It will decrease supply of U.S.dollars. 
A)  It will increase demand for U.S.dollars. 
B)  It will decrease demand for U.S.dollars. 
C)  It will increase supply of U.S.dollars. 
D)  It will decrease supply of U.S.dollars.

Question 6

What happened to the peso when the Argentine government succumbed to the market forces in 2002?

Accepted Answer

A)  Revalued 
B)  Devalued 
C)  Depreciated 
D)  Appreciated 
A)  Revalued 
B)  Devalued 
C)  Depreciated 
D)  Appreciated

Question 7

On May 12,2011,it cost U.S.$.04 to buy one Russian ruble.How many Russian rubles would U.S.$1 buy?

Accepted Answer

A)  40 
B)  33 
C)  25 
D)  14 
A)  40 
B)  33 
C)  25 
D)  14

Question 8

The most important single factor in determining the exchange rate in the short run is

Accepted Answer

A)  inflation differentials. 
B)  interest rate differentials. 
C)  monetary growth differentials. 
D)  price differentials. 
A)  inflation differentials. 
B)  interest rate differentials. 
C)  monetary growth differentials. 
D)  price differentials.

Question 9

Under a gold standard,a balance of payments deficit automatically

Accepted Answer

A)  raised interest rates. 
B)  decreased exports. 
C)  increased domestic prices. 
D)  increased imports. 
A)  raised interest rates. 
B)  decreased exports. 
C)  increased domestic prices. 
D)  increased imports.

Question 10

If exchange rates are determined in a floating rate system,what determines the value of a U.S.dollar in terms of euros?

Accepted Answer

A)  government exchange rate policies 
B)  IMF rules and policies 
C)  demand and supply 
D)  central bank interventions 
A)  government exchange rate policies 
B)  IMF rules and policies 
C)  demand and supply 
D)  central bank interventions

Question 11

Under the Bretton Woods system,devaluation was:

Accepted Answer

A)  ​normal 
B)  ​routine 
C)  ​rare 
D)  ​a last resort 
A)  ​normal 
B)  ​routine 
C)  ​rare 
D)  ​a last resort

Question 12

One of the problems that monetary unions eliminate is

Accepted Answer

A)  inflationary gaps. 
B)  recessionary gaps. 
C)  exchange rate instability. 
D)  business cycles. 
A)  inflationary gaps. 
B)  recessionary gaps. 
C)  exchange rate instability. 
D)  business cycles.

Question 13

The Bretton Woods agreements were ended when the

Accepted Answer

A)  European Common Market was formed. 
B)  OPEC countries raised the price of oil. 
C)  United States was forced to devalue its currency. 
D)  United States recognized Red China. 
A)  European Common Market was formed. 
B)  OPEC countries raised the price of oil. 
C)  United States was forced to devalue its currency. 
D)  United States recognized Red China.

Question 14

Fixed exchange rates are determined in free markets by the forces of demand and supply.

Accepted Answer

A) True 
 B)False

Question 15

If Japanese tourists visit Yellowstone Park,what is the effect in the foreign exchange market?

Accepted Answer

A)  It will increase demand for U.S.dollars. 
B)  It will decrease demand for U.S.dollars. 
C)  It will increase supply of U.S.dollars. 
D)  It will decrease supply of U.S.dollars. 
A)  It will increase demand for U.S.dollars. 
B)  It will decrease demand for U.S.dollars. 
C)  It will increase supply of U.S.dollars. 
D)  It will decrease supply of U.S.dollars.

Question 16

The purchasing power parity theory of exchange rate determination holds that the exchange rate between any two national currencies is fixed to reflect differences in the price levels in the two countries.

Accepted Answer

A) True 
 B)False

Question 17

The currency value of Agraria is set by government decree.Which of the following happens when the government alters the exchange rate so that its currency can buy more units of foreign currency?

Accepted Answer

A)  Reflation 
B)  Devaluation 
C)  Appreciation 
D)  Revaluation 
A)  Reflation 
B)  Devaluation 
C)  Appreciation 
D)  Revaluation

On June 3,2005,it cost 1.22 U.S.dollars to buy one euro.How many euros did it take to buy one U.S.dollar?

Figure 19-1 -Of the graphs in Figure 19-1,which one shows the effects of an increase in interest rates in Japan and a depreciation of the dollar?

If inflation in the United States is higher than in Japan,what will happen to the exchange rate between the U.S.dollar and the Japanese yen?

It presently costs 50 Canadian dollars for a lift ticket at Whistler Ski Resort in British Columbia.If the current value of the Canadian dollar is 0.68 U.S.dollars,how many U.S.dollars does it cost to ski at Whistler?

If Americans decide to buy more South African diamonds,what is the effect in the foreign market?

What happened to the peso when the Argentine government succumbed to the market forces in 2002?

On May 12,2011,it cost U.S.$.04 to buy one Russian ruble.How many Russian rubles would U.S.$1 buy?

The most important single factor in determining the exchange rate in the short run is

Under a gold standard,a balance of payments deficit automatically

If exchange rates are determined in a floating rate system,what determines the value of a U.S.dollar in terms of euros?

Under the Bretton Woods system,devaluation was:

One of the problems that monetary unions eliminate is

The Bretton Woods agreements were ended when the

Fixed exchange rates are determined in free markets by the forces of demand and supply.

If Japanese tourists visit Yellowstone Park,what is the effect in the foreign exchange market?

The purchasing power parity theory of exchange rate determination holds that the exchange rate between any two national currencies is fixed to reflect differences in the price levels in the two countries.

The currency value of Agraria is set by government decree.Which of the following happens when the government alters the exchange rate so that its currency can buy more units of foreign currency?

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

Exchange Rates and The Macroeconomy

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Exam 19: The International Monetary System Order Or Disorder

On June 3,2005,it cost 1.22 U.S.dollars to buy one euro.How many euros did it take to buy one U.S.dollar?

Figure 19-1 -Of the graphs in Figure 19-1,which one shows the effects of an increase in interest rates in Japan and a depreciation of the dollar?

If inflation in the United States is higher than in Japan,what will happen to the exchange rate between the U.S.dollar and the Japanese yen?

It presently costs 50 Canadian dollars for a lift ticket at Whistler Ski Resort in British Columbia.If the current value of the Canadian dollar is 0.68 U.S.dollars,how many U.S.dollars does it cost to ski at Whistler?

If Americans decide to buy more South African diamonds,what is the effect in the foreign market?

What happened to the peso when the Argentine government succumbed to the market forces in 2002?

On May 12,2011,it cost U.S.$.04 to buy one Russian ruble.How many Russian rubles would U.S.$1 buy?

The most important single factor in determining the exchange rate in the short run is

Under a gold standard,a balance of payments deficit automatically

If exchange rates are determined in a floating rate system,what determines the value of a U.S.dollar in terms of euros?

Under the Bretton Woods system,devaluation was:

One of the problems that monetary unions eliminate is

The Bretton Woods agreements were ended when the

Fixed exchange rates are determined in free markets by the forces of demand and supply.

If Japanese tourists visit Yellowstone Park,what is the effect in the foreign exchange market?

The purchasing power parity theory of exchange rate determination holds that the exchange rate between any two national currencies is fixed to reflect differences in the price levels in the two countries.

The currency value of Agraria is set by government decree.Which of the following happens when the government alters the exchange rate so that its currency can buy more units of foreign currency?

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

Exchange Rates and The Macroeconomy

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