Exam 19: The World of International Finance

Figure 19.1 -Referring to Figure 19.1, U.S. goods will become cheaper in Mexico if the exchange rate goes from ________ to ________ pesos to the dollar.

Suppose iPhones cost 180 euros and 240 dollars in Belgium and the United States, respectively, while binoculars cost 60 euros and 75 dollars in Belgium and the United States, respectively. If the exchange rate is 0.8 euros/dollar, the law of one price ________ for iPhones and ________ for binoculars.

As the Indian rupee depreciates relative to the dollar, total spending on Indian goods and assets will increase. Therefore, in the foreign exchange market, the

If the income from investments abroad and net transfer payments are negligible, the current account becomes equivalent to a country's net exports.

If the dollar depreciates against the euro it means that French-made goods become more expensive in the United States.

If the yen to dollar exchange rate moves from 105 to 115 yen per dollar, then the dollar has ________ and the yen has ________.

Some economists believe that the Asian crisis in 1997

A balance of payments surplus occurs if

If the U.S. real exchange rate decreases, U.S. imports will fall and U.S. exports will rise.

Although it declined in the first quarter of 2009, the United States was still running a trade deficit., which means that the United States would have to