Question 1

-It is clear from the diagram above that,under fixed exchange rates

Accepted Answer

A)  Germany has a balance-of-payments deficit and its currency is overvalued. 
B)  Germany has a balance-of-payments surplus and its currency is overvalued. 
C)  the United States has a balance-of-payments deficit and its currency is overvalued. 
D)  the United States has a balance-of-payments surplus and its currency is overvalued. 
E)  the United States must be giving up resources to purchase an excess supply of euros. 
A)  Germany has a balance-of-payments deficit and its currency is overvalued. 
B)  Germany has a balance-of-payments surplus and its currency is overvalued. 
C)  the United States has a balance-of-payments deficit and its currency is overvalued. 
D)  the United States has a balance-of-payments surplus and its currency is overvalued. 
E)  the United States must be giving up resources to purchase an excess supply of euros.

Question 2

The main reason that President Franklin Roosevelt went off the gold standard was that

Accepted Answer

A)  the U.S. gold reserves had been completely depleted. 
B)  he believed that a devalued dollar might rekindle a failing economy. 
C)  he foresaw the establishment of a new international agreement under the Bretton Woods system. 
D)  rumors that Britain would soon abandon the gold standard could no longer be ignored. 
E)  many economists of the time predicted higher dollar values if the gold standard was abandoned. 
A)  the U.S. gold reserves had been completely depleted. 
B)  he believed that a devalued dollar might rekindle a failing economy. 
C)  he foresaw the establishment of a new international agreement under the Bretton Woods system. 
D)  rumors that Britain would soon abandon the gold standard could no longer be ignored. 
E)  many economists of the time predicted higher dollar values if the gold standard was abandoned.

Question 3

The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates.
  
-If,because of some change in supply or demand,the exchange rate rises from $0.11 to $0.15 to the peso

Accepted Answer

A)  the peso has been devalued. 
B)  the dollar has been devalued. 
C)  the dollar has appreciated relative to the peso. 
D)  the peso has appreciated relative to the dollar. 
E)  both currencies have depreciated relative to each other. 
A)  the peso has been devalued. 
B)  the dollar has been devalued. 
C)  the dollar has appreciated relative to the peso. 
D)  the peso has appreciated relative to the dollar. 
E)  both currencies have depreciated relative to each other.

Question 4

Under a flexible exchange rate system,if the rate of inflation in the United States exceeds that in Japan

Accepted Answer

A)  the Japanese yen will appreciate relative to the dollar. 
B)  the dollar will be devalued. 
C)  gold will flow from Japan to the United States. 
D)  the U.S. demand for yen will shift to the left. 
E)  the exchange rate will remain the same, but exports and imports will fall. 
A)  the Japanese yen will appreciate relative to the dollar. 
B)  the dollar will be devalued. 
C)  gold will flow from Japan to the United States. 
D)  the U.S. demand for yen will shift to the left. 
E)  the exchange rate will remain the same, but exports and imports will fall.

Question 5

If,at current exchange rates,$1 equals 0.8333 euros,a German auto that costs 90,000 euros has a dollar price of about

Accepted Answer

A)  $75,000. 
B)  $83,000. 
C)  $90,000. 
D)  $108,000. 
E)  $111,000. 
A)  $75,000. 
B)  $83,000. 
C)  $90,000. 
D)  $108,000. 
E)  $111,000.

Question 6

The following question are based on the following diagram, showing the market for Swiss francs. Assume Switzerland and the United States are engaged in a system of fixed exchange rates. The official rate is $0.40 per franc.
  
-If,despite U.S.government intervention in the currency markets,the supply and demand curves remain as shown,the U.S government might try to

Accepted Answer

A)  curtail the tourism of Swiss citizens in the United States. 
B)  discourage imports of Swiss goods. 
C)  appreciate the dollar relative to the Swiss franc by changing the official exchange rate. 
D)  increase its imports from Switzerland and reduce them from other countries. 
E)  buy gold. 
A)  curtail the tourism of Swiss citizens in the United States. 
B)  discourage imports of Swiss goods. 
C)  appreciate the dollar relative to the Swiss franc by changing the official exchange rate. 
D)  increase its imports from Switzerland and reduce them from other countries. 
E)  buy gold.

-It is clear from the diagram above that,under fixed exchange rates

The main reason that President Franklin Roosevelt went off the gold standard was that

The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates. -If,because of some change in supply or demand,the exchange rate rises from $0.11 to $0.15 to the peso

Under a flexible exchange rate system,if the rate of inflation in the United States exceeds that in Japan

If,at current exchange rates,$1 equals 0.8333 euros,a German auto that costs 90,000 euros has a dollar price of about

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

International Trade

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Exam 28: Exchange Rates and the Balance of Payments

-It is clear from the diagram above that,under fixed exchange rates

The main reason that President Franklin Roosevelt went off the gold standard was that

The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates. -If,because of some change in supply or demand,the exchange rate rises from $0.11 to $0.15 to the peso

Under a flexible exchange rate system,if the rate of inflation in the United States exceeds that in Japan

If,at current exchange rates,$1 equals 0.8333 euros,a German auto that costs 90,000 euros has a dollar price of about

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

International Trade

Filters