Question 1

The actions of the arbitrageurs in the foreign exchange markets:

Accepted Answer

A) destabilize foreign exchange markets. 
B) are highly risky. 
C) have no effect on exchange rates. 
D) help ensure that exchange rates are equalized across all markets. 
E) are the same as those undertaken by speculators. 
A) destabilize foreign exchange markets. 
B) are highly risky. 
C) have no effect on exchange rates. 
D) help ensure that exchange rates are equalized across all markets. 
E) are the same as those undertaken by speculators.

Question 2

If the U.S.dollar appreciates,it implies that:

Accepted Answer

A) the value of the U.S.dollar has decreased. 
B) the value of foreign currency in terms of U.S.dollars has increased. 
C) fewer U.S.dollars are required to purchase foreign exchange. 
D) more U.S.dollars are required to purchase foreign exchange. 
E) exports will rise immediately. 
A) the value of the U.S.dollar has decreased. 
B) the value of foreign currency in terms of U.S.dollars has increased. 
C) fewer U.S.dollars are required to purchase foreign exchange. 
D) more U.S.dollars are required to purchase foreign exchange. 
E) exports will rise immediately.

Question 3

The U.S.dollar will appreciate if:

Accepted Answer

A) the U.S.demand for foreign exchange decreases. 
B) the U.S.demand for foreign exchange increases. 
C) the supply of foreign exchange increases in the foreign exchange market. 
D) Americans want to buy more foreign goods. 
E) foreigners want fewer American goods. 
A) the U.S.demand for foreign exchange decreases. 
B) the U.S.demand for foreign exchange increases. 
C) the supply of foreign exchange increases in the foreign exchange market. 
D) Americans want to buy more foreign goods. 
E) foreigners want fewer American goods.

Question 4

In the United States,imports have exceeded exports every year since 1979.

Accepted Answer

A) True 
 B)False

Question 5

The fact that exchange rates are nearly identical in different markets around the world is due to:

Accepted Answer

A) the actions of speculators. 
B) official action by central banks around the world. 
C) the actions of arbitrageurs. 
D) the agreement by the policy makers of major industrial countries. 
E) the actions of currency converters. 
A) the actions of speculators. 
B) official action by central banks around the world. 
C) the actions of arbitrageurs. 
D) the agreement by the policy makers of major industrial countries. 
E) the actions of currency converters.

Question 6

In the United States,imports have exceeded exports every year since 1966.

Accepted Answer

A) True 
 B)False

Question 7

Prior to World War I,the international financial system had operated on:

Accepted Answer

A) a floating exchange rate system. 
B) a managed exchange rate system. 
C) a laissez-faire exchange rate system. 
D) the gold standard. 
E) the dollar standard. 
A) a floating exchange rate system. 
B) a managed exchange rate system. 
C) a laissez-faire exchange rate system. 
D) the gold standard. 
E) the dollar standard.

Question 8

Which of the following is not considered a unilateral transfer?

Accepted Answer

A) Foreign aid from one government to another 
B) Income earned from foreign investments 
C) Personal gifts to friends in foreign countries 
D) Donations to foreign countries from non-government domestic charities 
E) Government transfers to foreign residents 
A) Foreign aid from one government to another 
B) Income earned from foreign investments 
C) Personal gifts to friends in foreign countries 
D) Donations to foreign countries from non-government domestic charities 
E) Government transfers to foreign residents

Question 9

In a fixed exchange rate system,rates are maintained by the central bank's ongoing purchases and sales of currencies.

Accepted Answer

A) True 
 B)False

Question 10

Suppose a basket of internationally traded goods that sells for $10,000 in the United States sells for €8,000 in the euro zone.According to the purchasing power parity theory,the equilibrium exchange rate should be equal to _____.

Accepted Answer

A) $2.50 per euro 
B) $1.50 per euro 
C) $1.25 per euro 
D) $1.00 per euro 
E) $.50 per euro 
A) $2.50 per euro 
B) $1.50 per euro 
C) $1.25 per euro 
D) $1.00 per euro 
E) $.50 per euro

The actions of the arbitrageurs in the foreign exchange markets:

If the U.S.dollar appreciates,it implies that:

The U.S.dollar will appreciate if:

In the United States,imports have exceeded exports every year since 1979.

The fact that exchange rates are nearly identical in different markets around the world is due to:

In the United States,imports have exceeded exports every year since 1966.

Prior to World War I,the international financial system had operated on:

Which of the following is not considered a unilateral transfer?

In a fixed exchange rate system,rates are maintained by the central bank's ongoing purchases and sales of currencies.

Suppose a basket of internationally traded goods that sells for $10,000 in the United States sells for €8,000 in the euro zone.According to the purchasing power parity theory,the equilibrium exchange rate should be equal to _____.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

Economic Development

Filters

Exam 18: International Finance

The actions of the arbitrageurs in the foreign exchange markets:

If the U.S.dollar appreciates,it implies that:

The U.S.dollar will appreciate if:

In the United States,imports have exceeded exports every year since 1979.

The fact that exchange rates are nearly identical in different markets around the world is due to:

In the United States,imports have exceeded exports every year since 1966.

Prior to World War I,the international financial system had operated on:

Which of the following is not considered a unilateral transfer?

In a fixed exchange rate system,rates are maintained by the central bank's ongoing purchases and sales of currencies.

Suppose a basket of internationally traded goods that sells for $10,000 in the United States sells for €8,000 in the euro zone.According to the purchasing power parity theory,the equilibrium exchange rate should be equal to _____.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

Economic Development

Filters