Question 1

If a Japanese toy costs 40 yen and the yen per dollar exchange rate is 5,what is the correct way to calculate the dollar price of the Japanese toy?

Accepted Answer

A)  40 × 5 
B)  40/5 
C)  40 × 0.2 
D)  40/0.2 
A)  40 × 5 
B)  40/5 
C)  40 × 0.2 
D)  40/0.2

Question 2

Which of the following is likely to be true of the nominal and the real exchange rates in the short run and in the long run if prices in two countries do not respond to exchange rate changes?

Accepted Answer

A)  The real and the nominal exchange rates between the currencies move proportionally in both the short run and the long run. 
B)  The real and the nominal exchange rates between the currencies move proportionally in the short run but not in the long run. 
C)  The real and the nominal exchange rates between the currencies move proportionally in the long run but not in the short run. 
D)  The real and the nominal exchange rates between the currencies remain constant over time. 
A)  The real and the nominal exchange rates between the currencies move proportionally in both the short run and the long run. 
B)  The real and the nominal exchange rates between the currencies move proportionally in the short run but not in the long run. 
C)  The real and the nominal exchange rates between the currencies move proportionally in the long run but not in the short run. 
D)  The real and the nominal exchange rates between the currencies remain constant over time.

Question 3

Under a flexible exchange rate system,the equilibrium exchange rate is established by ________.

Accepted Answer

A)  the government 
B)  the foreign exchange market 
C)  the monetary authority 
D)  the foreign goods market 
A)  the government 
B)  the foreign exchange market 
C)  the monetary authority 
D)  the foreign goods market

Question 4

Assuming that 1 dollar trades for 50 rupees,what is the dollar cost of 750 rupees?

Accepted Answer

A)  $5 
B)  $15 
C)  $50 
D)  $75 
A)  $5 
B)  $15 
C)  $50 
D)  $75

Question 5

If a currency is said to be undervalued relative to the dollar,then the dollar is understood to be worth ________.

Accepted Answer

A)  more of that currency than it would have been under a fixed exchange rate regime 
B)  less of that currency than it would have been under a fixed exchange rate regime 
C)  more of that currency than it would have been under a managed exchange rate regime 
D)  more of that currency than it would have been under a flexible exchange rate regime 
A)  more of that currency than it would have been under a fixed exchange rate regime 
B)  less of that currency than it would have been under a fixed exchange rate regime 
C)  more of that currency than it would have been under a managed exchange rate regime 
D)  more of that currency than it would have been under a flexible exchange rate regime

Question 6

The ________ exchange rate depends on the ________ exchange rate and the ________ of domestic and foreign prices.

Accepted Answer

A)  nominal; real; ratio 
B)  real; nominal ; product 
C)  real; nominal; ratio 
D)  nominal; real; product 
A)  nominal; real; ratio 
B)  real; nominal ; product 
C)  real; nominal; ratio 
D)  nominal; real; product

Question 7

If the government of a country is maintaining an overvalued currency against the dollar,then the quantity of ________ in the foreign exchange market.

Accepted Answer

A)  dollars supplied will exceed the quantity of dollars demanded 
B)  dollars demanded will equal the quantity of dollars supplied 
C)  dollars demanded will exceed the quantity of dollars supplied 
D)  domestic currency demanded will exceed the quantity of dollars supplied 
A)  dollars supplied will exceed the quantity of dollars demanded 
B)  dollars demanded will equal the quantity of dollars supplied 
C)  dollars demanded will exceed the quantity of dollars supplied 
D)  domestic currency demanded will exceed the quantity of dollars supplied

Question 8

If the ratio of the dollar price of a U.S.toy to the dollar price of the same toy sold in China is less than 1,retailers in the United States should ________.

Accepted Answer

A)  buy the toys from U.S. suppliers 
B)  buy the toys from Chinese suppliers 
C)  buy the toys from both Chinese suppliers and U.S. suppliers 
D)  not buy the toys from either Chinese suppliers or U.S. suppliers 
A)  buy the toys from U.S. suppliers 
B)  buy the toys from Chinese suppliers 
C)  buy the toys from both Chinese suppliers and U.S. suppliers 
D)  not buy the toys from either Chinese suppliers or U.S. suppliers

Question 9

The ratio of the dollar price of a toy in the United States to the dollar price of the same toy in China represents the ________ between the two currencies.

Accepted Answer

A)  nominal exchange rate 
B)  real exchange rate 
C)  expected exchange rate 
D)  ordinal exchange rate 
A)  nominal exchange rate 
B)  real exchange rate 
C)  expected exchange rate 
D)  ordinal exchange rate

Question 10

Historically,the exchange rate chosen by the Chinese authorities made the yuan ________.

Accepted Answer

A)  undervalued relative to the dollar 
B)  overvalued relative to the dollar 
C)  appreciate against the dollar 
D)  depreciate against the dollar 
A)  undervalued relative to the dollar 
B)  overvalued relative to the dollar 
C)  appreciate against the dollar 
D)  depreciate against the dollar

Question 11

The following table shows the exchange rate between several foreign currencies and the U.S. dollar.
  
-Refer to the table above.Between May 2016 and May 2017,the U.S.dollar has ________ against the euro and ________ against the yen.

Accepted Answer

A)  appreciated; appreciated 
B)  depreciated; appreciated 
C)  appreciated; depreciated 
D)  depreciated; depreciated 
A)  appreciated; appreciated 
B)  depreciated; appreciated 
C)  appreciated; depreciated 
D)  depreciated; depreciated

Question 12

A flexible exchange rate is also referred to as a(n)________.

Accepted Answer

A)  open market exchange rate 
B)  nominal exchange rate 
C)  liquid exchange rate 
D)  floating exchange rate 
A)  open market exchange rate 
B)  nominal exchange rate 
C)  liquid exchange rate 
D)  floating exchange rate

Question 13

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

Accepted Answer

A)  its currency will appreciate 
B)  its currency will depreciate 
C)  its currency will initially appreciate and then depreciate 
D)  the value of its currency in the foreign exchange market will not be affected 
A)  its currency will appreciate 
B)  its currency will depreciate 
C)  its currency will initially appreciate and then depreciate 
D)  the value of its currency in the foreign exchange market will not be affected

Question 14

What is the definition of the real exchange rate?

Accepted Answer

The real exchange rate is the ratio of t

Question 15

Everything else being equal,how will a decrease in the interest rate in Mexico affect Mexico's GDP?

Accepted Answer

A decrease in the interest rate in Mexic

Question 16

If an undervalued currency is allowed to float,________.

Accepted Answer

A)  its value will appreciate relative to other currencies 
B)  its value will depreciate relative to other currencies 
C)  its quantity supplied in exchange for other currencies will decrease 
D)  its quantity demanded in exchange for other currencies will increase 
A)  its value will appreciate relative to other currencies 
B)  its value will depreciate relative to other currencies 
C)  its quantity supplied in exchange for other currencies will decrease 
D)  its quantity demanded in exchange for other currencies will increase

Question 17

Everything else being equal,if the dollar appreciates against the peso,________.

Accepted Answer

A)  U.S. exports to and imports from Mexico will both increase 
B)  U.S. exports to and imports from Mexico will both decrease 
C)  the United States will export more to and import less from Mexico 
D)  the United States will import more from and export less to Mexico 
A)  U.S. exports to and imports from Mexico will both increase 
B)  U.S. exports to and imports from Mexico will both decrease 
C)  the United States will export more to and import less from Mexico 
D)  the United States will import more from and export less to Mexico

Question 18

Which of the following statements is true?

Accepted Answer

A)  Black markets for currency are more likely to exist in countries with overvalued currencies than with undervalued currencies. 
B)  Black markets for currency are equally likely to exist in countries with undervalued currencies or with overvalued currencies. 
C)  Black markets for currency are more likely to exist in countries with undervalued currencies than with overvalued currencies. 
D)  Black markets for currency are more likely to exist in countries with convertible currencies than with non-convertible currencies. 
A)  Black markets for currency are more likely to exist in countries with overvalued currencies than with undervalued currencies. 
B)  Black markets for currency are equally likely to exist in countries with undervalued currencies or with overvalued currencies. 
C)  Black markets for currency are more likely to exist in countries with undervalued currencies than with overvalued currencies. 
D)  Black markets for currency are more likely to exist in countries with convertible currencies than with non-convertible currencies.

Question 19

The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan.
  
-Refer to the figure above.If the yuan is allowed to float,at exchange rates above E yuan per dollar,________ the value of the dollar in the foreign exchange market.

Accepted Answer

A)  the excess demand for dollars in exchange for yuan increases 
B)  the excess demand for dollars in exchange for yuan lowers 
C)  the excess supply of dollars in exchange for yuan increases 
D)  the excess supply of dollars in exchange for yuan lowers 
A)  the excess demand for dollars in exchange for yuan increases 
B)  the excess demand for dollars in exchange for yuan lowers 
C)  the excess supply of dollars in exchange for yuan increases 
D)  the excess supply of dollars in exchange for yuan lowers

Question 20

The Chinese government allowed the U.S.dollar to depreciate against the yuan during ________ and to appreciate against the yuan since ________.

Accepted Answer

A)  1998-2005; 2005 
B)  1998-2005; 2009 
C)  2005-2008; 2009 
D)  2005-2008; 2014 
A)  1998-2005; 2005 
B)  1998-2005; 2009 
C)  2005-2008; 2009 
D)  2005-2008; 2014

If a Japanese toy costs 40 yen and the yen per dollar exchange rate is 5,what is the correct way to calculate the dollar price of the Japanese toy?

Which of the following is likely to be true of the nominal and the real exchange rates in the short run and in the long run if prices in two countries do not respond to exchange rate changes?

Under a flexible exchange rate system,the equilibrium exchange rate is established by ________.

Assuming that 1 dollar trades for 50 rupees,what is the dollar cost of 750 rupees?

If a currency is said to be undervalued relative to the dollar,then the dollar is understood to be worth ________.

The exchange rate depends on the exchange rate and the of domestic and foreign prices.

If the government of a country is maintaining an overvalued currency against the dollar,then the quantity of ________ in the foreign exchange market.

If the ratio of the dollar price of a U.S.toy to the dollar price of the same toy sold in China is less than 1,retailers in the United States should ________.

The ratio of the dollar price of a toy in the United States to the dollar price of the same toy in China represents the ________ between the two currencies.

Historically,the exchange rate chosen by the Chinese authorities made the yuan ________.

The following table shows the exchange rate between several foreign currencies and the U.S. dollar. -Refer to the table above.Between May 2016 and May 2017,the U.S.dollar has against the euro and against the yen.

A flexible exchange rate is also referred to as a(n)________.

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

What is the definition of the real exchange rate?

Everything else being equal,how will a decrease in the interest rate in Mexico affect Mexico's GDP?

If an undervalued currency is allowed to float,________.

Everything else being equal,if the dollar appreciates against the peso,________.

Which of the following statements is true?

The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan. -Refer to the figure above.If the yuan is allowed to float,at exchange rates above E yuan per dollar,________ the value of the dollar in the foreign exchange market.

The Chinese government allowed the U.S.dollar to depreciate against the yuan during and to appreciate against the yuan since .

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Filters

Exam 15: Open Economy Macroeconomics

If a Japanese toy costs 40 yen and the yen per dollar exchange rate is 5,what is the correct way to calculate the dollar price of the Japanese toy?

Which of the following is likely to be true of the nominal and the real exchange rates in the short run and in the long run if prices in two countries do not respond to exchange rate changes?

Under a flexible exchange rate system,the equilibrium exchange rate is established by ________.

Assuming that 1 dollar trades for 50 rupees,what is the dollar cost of 750 rupees?

If a currency is said to be undervalued relative to the dollar,then the dollar is understood to be worth ________.

The ________ exchange rate depends on the ________ exchange rate and the ________ of domestic and foreign prices.

If the government of a country is maintaining an overvalued currency against the dollar,then the quantity of ________ in the foreign exchange market.

If the ratio of the dollar price of a U.S.toy to the dollar price of the same toy sold in China is less than 1,retailers in the United States should ________.

The ratio of the dollar price of a toy in the United States to the dollar price of the same toy in China represents the ________ between the two currencies.

Historically,the exchange rate chosen by the Chinese authorities made the yuan ________.

The following table shows the exchange rate between several foreign currencies and the U.S. dollar. -Refer to the table above.Between May 2016 and May 2017,the U.S.dollar has ________ against the euro and ________ against the yen.

A flexible exchange rate is also referred to as a(n)________.

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

What is the definition of the real exchange rate?

Everything else being equal,how will a decrease in the interest rate in Mexico affect Mexico's GDP?

If an undervalued currency is allowed to float,________.

Everything else being equal,if the dollar appreciates against the peso,________.

Which of the following statements is true?

The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan. -Refer to the figure above.If the yuan is allowed to float,at exchange rates above E yuan per dollar,________ the value of the dollar in the foreign exchange market.

The Chinese government allowed the U.S.dollar to depreciate against the yuan during ________ and to appreciate against the yuan since ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Filters

The exchange rate depends on the exchange rate and the of domestic and foreign prices.

The following table shows the exchange rate between several foreign currencies and the U.S. dollar. -Refer to the table above.Between May 2016 and May 2017,the U.S.dollar has against the euro and against the yen.

The Chinese government allowed the U.S.dollar to depreciate against the yuan during and to appreciate against the yuan since .