Exam 15: Open Economy Macroeconomics

Assume that at the beginning of 2012,1 dollar could be traded for 5 yuan.If in 2013,1 dollar was being traded for 6 yuan,it can be concluded that ________.

The nominal exchange rate is a price.

The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan. -Refer to the figure above.If the exchange rate is fixed above E yuan per dollar,________.

If the dollar price of a good manufactured in the United States is $6 and the dollar price of the same good manufactured in India is $8,should retailers of the good in the United States purchase the good from Indian suppliers or from U.S.suppliers?

Everything else being equal,an appreciation of the dollar against the yuan ________.

The Chinese government kept the yuan-per-dollar exchange rate fixed from 1998 until 2015.

Which of the following variables is the key determinant in deciding whether goods are to be bought domestically or imported?

Which of the following is most likely to cause a rightward shift of the demand curve for dollars in exchange for the Chinese yuan?

If the United States sells airplanes to Japan,the U.S.airplane manufacturers are paid with ________.

What is the correct way to calculate the dollar price of a British car,if we know the price of the car in British pounds and we also know the British per dollar exchange rate?

An increase in the value of the foreign currency in terms of the domestic currency means that ________.

How do changes in interest rates affect exchange rates?

What was the main reason the Chinese authorities kept the dollar overvalued?

Which of the following is likely to occur when the U.S.dollar is undervalued relative to the peso?

When the ratio of domestic prices to foreign prices falls,________.

If the government of a country adopts contractionary monetary policy,________.

The following figure shows the net exports curve for a country: -Refer to the figure above.Explain why the real exchange rate cannot stay far above R*.

Scenario: Suppose India borrows $10,000 from the United States at the beginning of 2016. The flexible exchange rate is 50 Indian rupees per dollar. -Refer to the scenario above.If India wants to repay a lower sum of money to the United States,it should ________.

A decrease in the interest rates in a country ________.

Everything else being equal,a decrease in the supply of dollars in exchange for pesos will cause the dollar ________ the quantity of dollars being traded in the foreign exchange market.