Question 1

Suppose there is an increase in the Canadian demand for Swiss computers. This results in a(n)

Accepted Answer

A)  increase in the demand for Swiss francs 
B)  decrease in the demand for Swiss francs 
C)  increase in the supply of Swiss francs to Canada 
D)  decrease in the supply of Swiss francs to Canada 
A)  increase in the demand for Swiss francs 
B)  decrease in the demand for Swiss francs 
C)  increase in the supply of Swiss francs to Canada 
D)  decrease in the supply of Swiss francs to Canada

Question 2

Which of the following is classified as an outflow in the U.S. balance of payments?

Accepted Answer

A)  U.S. exports of goods and services 
B)  U.S. gifts to other countries 
C)  a flow of investment earnings into the U.S. 
D)  loans made by foreign banks to U.S. companies 
A)  U.S. exports of goods and services 
B)  U.S. gifts to other countries 
C)  a flow of investment earnings into the U.S. 
D)  loans made by foreign banks to U.S. companies

Question 3

When a nation realizes a current account deficit, it becomes a net lender to the rest of the world.

Accepted Answer

A) True 
 B)False

Question 4

When the dollar depreciates against the Swiss franc, it is more difficult for U.S. firms to sell their goods in Swiss markets.

Accepted Answer

A) True 
 B)False

Question 5

Figure 17.1 Supply and Demand Curves for the Swiss Franc
  
-Refer to Figure 17.1. Suppose the exchange rate is $0.70 per franc. At this exchange rate there is an ______ of francs that leads to a ______ in the dollar price of the franc, a(n) ______ in the quantity of francs supplied, and a(n) ______ in the quantity of francs demanded.

Accepted Answer

A)  excess demand, rise, increase, decrease 
B)  excess demand, rise, decrease, increase 
C)  excess supply, fall, decrease, increase 
D)  excess supply, fall, increase, decrease 
A)  excess demand, rise, increase, decrease 
B)  excess demand, rise, decrease, increase 
C)  excess supply, fall, decrease, increase 
D)  excess supply, fall, increase, decrease

Question 6

In the current account, the category "unilateral transfers" refers to

Accepted Answer

A)  gifts 
B)  taxes 
C)  statistical discrepancies 
D)  services 
A)  gifts 
B)  taxes 
C)  statistical discrepancies 
D)  services

Question 7

To offset an appreciation of the dollar, the Federal Reserve can buy dollars in the foreign exchange market.

Accepted Answer

A) True 
 B)False

Question 8

When the dollar appreciates against the British pound, U.S. exporting firms find it harder to compete in the British market.

Accepted Answer

A) True 
 B)False

Question 9

Figure 17.2 The Market for Swiss Francs
  
-Refer to Figure 17.2. A shift in the demand for francs from D0 to D2, or a shift in the supply of francs from S0 to S1 would result in

Accepted Answer

A)  a depreciation in the dollar against the franc 
B)  an appreciation in the dollar against the franc 
C)  no change in the dollar/franc exchange rate 
D)  an unpredictable effect on the dollar/franc exchange rate 
A)  a depreciation in the dollar against the franc 
B)  an appreciation in the dollar against the franc 
C)  no change in the dollar/franc exchange rate 
D)  an unpredictable effect on the dollar/franc exchange rate

Question 10

A major difference between the Federal Reserve and the European Central Bank is that

Accepted Answer

A)  the Fed represents just one country, while the ECB represents eight countries 
B)  the Fed controls monetary policy, while the ECB controls fiscal policy 
C)  the Fed was created in 1913, while the ECB was created in 1944 
D)  the Fed balances price and output stability, while the ECB focuses only on price stability 
A)  the Fed represents just one country, while the ECB represents eight countries 
B)  the Fed controls monetary policy, while the ECB controls fiscal policy 
C)  the Fed was created in 1913, while the ECB was created in 1944 
D)  the Fed balances price and output stability, while the ECB focuses only on price stability

Suppose there is an increase in the Canadian demand for Swiss computers. This results in a(n)

Which of the following is classified as an outflow in the U.S. balance of payments?

When a nation realizes a current account deficit, it becomes a net lender to the rest of the world.

When the dollar depreciates against the Swiss franc, it is more difficult for U.S. firms to sell their goods in Swiss markets.

In the current account, the category "unilateral transfers" refers to

To offset an appreciation of the dollar, the Federal Reserve can buy dollars in the foreign exchange market.

When the dollar appreciates against the British pound, U.S. exporting firms find it harder to compete in the British market.

Figure 17.2 The Market for Swiss Francs -Refer to Figure 17.2. A shift in the demand for francs from D₀ to D₂, or a shift in the supply of francs from S₀ to S₁ would result in

A major difference between the Federal Reserve and the European Central Bank is that

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

Economic Systems and Developing Countries

Filters

Exam 17: International Finance

Suppose there is an increase in the Canadian demand for Swiss computers. This results in a(n)

Which of the following is classified as an outflow in the U.S. balance of payments?

When a nation realizes a current account deficit, it becomes a net lender to the rest of the world.

When the dollar depreciates against the Swiss franc, it is more difficult for U.S. firms to sell their goods in Swiss markets.

In the current account, the category "unilateral transfers" refers to

To offset an appreciation of the dollar, the Federal Reserve can buy dollars in the foreign exchange market.

When the dollar appreciates against the British pound, U.S. exporting firms find it harder to compete in the British market.

Figure 17.2 The Market for Swiss Francs -Refer to Figure 17.2. A shift in the demand for francs from D0 to D2, or a shift in the supply of francs from S0 to S1 would result in

A major difference between the Federal Reserve and the European Central Bank is that

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

Economic Systems and Developing Countries

Filters

Figure 17.2 The Market for Swiss Francs -Refer to Figure 17.2. A shift in the demand for francs from D₀ to D₂, or a shift in the supply of francs from S₀ to S₁ would result in