Exam 9: The Exchange Rate and the Balance of Payments

The European Commission believes that in 2020 exports of goods and services from Spain will be 22 times larger than in 2010. Irish exports are expected to have grown by 15 percent over the same period. If imports remain constant

If there is an increase in the expected future U.S. exchange rate, there is

-The table above shows the exchange rates between various currencies and the U.S. dollar. Between 2015 and 2016, the U.S. dollar ________ against the Euro and ________ against the Japanese yen.

Other things remaining the same, if the U.S. interest rate differential increases, the demand curve for U.S. dollars shifts ________ and the supply curve of U.S. dollars shifts ________.

If the exchange rate between the dollar and Japanese yen is below the equilibrium exchange rate, there will be a ________ of dollars, and the exchange rate will ________.

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

Why do people and firms in the United States supply dollars to the foreign exchange market?

On the island country of Sunshine where the unit of currency is fish, net exports are 50 fish, saving is 250 fish, net taxes are 100 fish, and the government budget deficit is 175 fish. The private sector has a

-In the table above, what does the private sector surplus equal?

Which of the following is included in a nation's current account? I. the import of services II. a change of foreign currency holdings III. net transfers, such as foreign aid payments

In June 2008, the dollar bought 1.6 Brazilian reals and in October, the dollar bought 2.4 reals. This resulted in a

If imports are $1,200 billion and exports are $1,300 billion, while net interest income and net transfers are zero, what is the current account balance?

As the exchange rate ________, the quantity of dollars ________ in the foreign exchange market ________.

The sum of the current account, capital and financial account, and official settlements account is

Adjusted for risk, interest rate parity

If the current account has a negative balance of $100 and the capital and financial account has a positive balance of $80, there will be ________ in official reserves of ________.

Which of the following is included in a nation's capital and financial account? I. the purchase of foreign stocks and bonds II. the sale of foreign stocks and bonds III. importing a piece of capital equipment

Over the past decade, the United States has had a current account deficit and capital account deficit.

If the Fed wants to depreciate the dollar against the yen, the Fed will

-Using the table above, if the current market value of the dollar is 125 francs per dollar