Question 1

​Holding other things constant,if the Japanese Yen,appreciates,it makes the imports to Japan

Accepted Answer

A) ​More expensive for Japanese customer 
B) Less expensive for Japanese customers 
C) Neither more or less expensive for importers 
D) ​None of the above 
A) ​More expensive for Japanese customer 
B) Less expensive for Japanese customers 
C) Neither more or less expensive for importers 
D) ​None of the above

Question 2

​Holding other things constant,if the Japanese Yen,depreciates,it makes the Japanese products

Accepted Answer

A) ​Less attractive to US customers 
B) More attractive to US customers 
C) Neither more nor less attractive to US customers 
D) ​None of the above 
A) ​Less attractive to US customers 
B) More attractive to US customers 
C) Neither more nor less attractive to US customers 
D) ​None of the above

Question 3

If the Chinese Yuan devalues against the US dollar,then​

Accepted Answer

A) ​Both the US exporters and Chinese importers would benefit 
B) The US exporters would benefit while the Chinese importers would be hurt 
C) The US exporters would be hurt while the Chinese consumers would benefit 
D) ​Both the US exporters and Chinese importers would be hurt 
A) ​Both the US exporters and Chinese importers would benefit 
B) The US exporters would benefit while the Chinese importers would be hurt 
C) The US exporters would be hurt while the Chinese consumers would benefit 
D) ​Both the US exporters and Chinese importers would be hurt

Question 4

If the Chinese Yuan devalues against the US dollar,then​

Accepted Answer

A) ​Both the US exporters and Chinese exporters would benefit 
B) The US exporters would benefit while the Chinese exporters would be hurt 
C) The US exporters would be hurt while the Chinese exporters would benefit 
D) ​Both the US exporters and Chinese exporters would be hurt 
A) ​Both the US exporters and Chinese exporters would benefit 
B) The US exporters would benefit while the Chinese exporters would be hurt 
C) The US exporters would be hurt while the Chinese exporters would benefit 
D) ​Both the US exporters and Chinese exporters would be hurt

Question 5

​Holding other things constant,an increase in the inflation rate in the US compared to China may cause the demand for dollar to _____________ and the supply for dollar to __________.

Accepted Answer

A) ​Increase;decrease 
B) Increase,increase 
C) Decrease;Increase 
D) ​Decrease;Decrease 
A) ​Increase;decrease 
B) Increase,increase 
C) Decrease;Increase 
D) ​Decrease;Decrease

Question 6

​In the case where interest rates are lower in Japan,which of the following is an example of a "carry trade"

Accepted Answer

A) ​Increase borrowing in the US,convert to Yuan and invest in financial assets in Japan 
B) Increase borrowing in Japan and invest in Japan 
C) Increase borrowing in Japan,convert to Dollars and invest in the US 
D) ​Increase borrowing in the US and invest in the US 
A) ​Increase borrowing in the US,convert to Yuan and invest in financial assets in Japan 
B) Increase borrowing in Japan and invest in Japan 
C) Increase borrowing in Japan,convert to Dollars and invest in the US 
D) ​Increase borrowing in the US and invest in the US

Question 7

In order for bubbles to occur,expectations of a price increase usually_______demand and ______supply​

Accepted Answer

A) ​Increases;Increases 
B) Increases;Decreases 
C) Decreases;Increases 
D) ​Decreases;Decreases 
A) ​Increases;Increases 
B) Increases;Decreases 
C) Decreases;Increases 
D) ​Decreases;Decreases

Question 8

If Chinese consumers want to buy US goods,they will​

Accepted Answer

A) ​Buy Yuan and sell US Dollars 
B) Sell Yuan and buy US Dollars 
C) Neither buy nor sell Yuan 
D) ​Neither buy nor sell dollars 
A) ​Buy Yuan and sell US Dollars 
B) Sell Yuan and buy US Dollars 
C) Neither buy nor sell Yuan 
D) ​Neither buy nor sell dollars

Question 9

​Currency devaluation _______import consumers because______

Accepted Answer

A) ​Helps;imports are more expensive 
B) Hurts;imports are more expensive 
C) Helps;imports are less expensive 
D) ​Hurts;imports are less expensive 
A) ​Helps;imports are more expensive 
B) Hurts;imports are more expensive 
C) Helps;imports are less expensive 
D) ​Hurts;imports are less expensive

Question 10

​The purchasing power parity predicts that if the price level in the US falls relative to Mexico,

Accepted Answer

A) ​The dollar will appreciate relative to the peso 
B) The dollar will depreciate relative to the peso 
C) There is no effect on either currency 
D) ​PPP predicts price level will normalize in the long-run 
A) ​The dollar will appreciate relative to the peso 
B) The dollar will depreciate relative to the peso 
C) There is no effect on either currency 
D) ​PPP predicts price level will normalize in the long-run

Question 11

Currency devaluation ______export producers because_______​

Accepted Answer

A) ​Helps;exports are more expensive 
B) Hurts;exports are more expensive 
C) Helps;exports are less expensive 
D) ​Hurts;exports are less expensive 
A) ​Helps;exports are more expensive 
B) Hurts;exports are more expensive 
C) Helps;exports are less expensive 
D) ​Hurts;exports are less expensive

Question 12

The US is experiencing a technological boom.Relative to the other countries with lower technological growth,we expect to see the dollar​

Accepted Answer

A) ​Appreciate 
B) Depreciate 
C) Stay constant in value 
D) ​None of the above 
A) ​Appreciate 
B) Depreciate 
C) Stay constant in value 
D) ​None of the above

Question 13

​Holding other things constant,decreases in the price level in the US will

Accepted Answer

A) ​Cause the dollar to appreciate 
B) Cause the dollar to depreciate 
C) Does not affect the dollar value 
D) ​None of the above 
A) ​Cause the dollar to appreciate 
B) Cause the dollar to depreciate 
C) Does not affect the dollar value 
D) ​None of the above

Question 14

​Currency devaluations hurt consumers because they make imports ________ expensive

Accepted Answer

A) ​Less 
B) More 
C) All of the above 
D) ​None of the above 
A) ​Less 
B) More 
C) All of the above 
D) ​None of the above

Question 15

An American consumer wants to buy a Swiss watch.The exchange rate is 1USD=0.89 CHF(Swiss Francs).The watch costs 100 Swiss Francs.How much would it cost him in dollars?​

Accepted Answer

A) ​$89 
B) $112.36 
C) $100 
D) ​$160.82 
A) ​$89 
B) $112.36 
C) $100 
D) ​$160.82

Question 16

​If US consumers want to buy Chinese goods,they will

Accepted Answer

A) ​Buy Yuan and sell US Dollars 
B) Sell Yuan and buy US Dollars 
C) Neither buy nor sell Yuan 
D) ​Neither buy nor sell dollars 
A) ​Buy Yuan and sell US Dollars 
B) Sell Yuan and buy US Dollars 
C) Neither buy nor sell Yuan 
D) ​Neither buy nor sell dollars

Question 17

Due to a recession in the US,the average rate of return on investments is likely to fall causing the demand for US dollar to ​

Accepted Answer

A) ​Increase 
B) Decrease 
C) Not change 
D) ​None of the above 
A) ​Increase 
B) Decrease 
C) Not change 
D) ​None of the above

Question 18

​A widget costs $50 in the US and CAD$53 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

Accepted Answer

A) ​Appreciate 
B) Depreciate 
C) Not change 
D) ​None of the above 
A) ​Appreciate 
B) Depreciate 
C) Not change 
D) ​None of the above

Question 19

​A weaker peso,relative to the US dollar,causes the demand for Mexican exports to_______ and US imports to ________

Accepted Answer

A) ​Increase;Decrease 
B) Decrease;Increase 
C) Increase;Increase 
D) ​Decrease;Decrease 
A) ​Increase;Decrease 
B) Decrease;Increase 
C) Increase;Increase 
D) ​Decrease;Decrease

Question 20

​If the Chinese Yuan devalues against the US dollar,then

Accepted Answer

A) ​Both the US importers and Chinese importers would benefit 
B) The US importers would benefit while the Chinese importers would be hurt 
C) The US importers would be hurt while the Chinese importers would benefit 
D) ​Both the US importers and Chinese importers would be hurt 
A) ​Both the US importers and Chinese importers would benefit 
B) The US importers would benefit while the Chinese importers would be hurt 
C) The US importers would be hurt while the Chinese importers would benefit 
D) ​Both the US importers and Chinese importers would be hurt

Exam 10: Foreign Exchange, Trade, and Bubbles

​Holding other things constant,if the Japanese Yen,appreciates,it makes the imports to Japan

​Holding other things constant,if the Japanese Yen,depreciates,it makes the Japanese products

If the Chinese Yuan devalues against the US dollar,then​

If the Chinese Yuan devalues against the US dollar,then​

​Holding other things constant,an increase in the inflation rate in the US compared to China may cause the demand for dollar to _____________ and the supply for dollar to __________.

​In the case where interest rates are lower in Japan,which of the following is an example of a "carry trade"

In order for bubbles to occur,expectations of a price increase usually_______demand and ______supply​

If Chinese consumers want to buy US goods,they will​

​Currency devaluation _______import consumers because______

​The purchasing power parity predicts that if the price level in the US falls relative to Mexico,

Currency devaluation ______export producers because_______​

The US is experiencing a technological boom.Relative to the other countries with lower technological growth,we expect to see the dollar​

​Holding other things constant,decreases in the price level in the US will

​Currency devaluations hurt consumers because they make imports ________ expensive

An American consumer wants to buy a Swiss watch.The exchange rate is 1USD=0.89 CHF(Swiss Francs).The watch costs 100 Swiss Francs.How much would it cost him in dollars?​

​If US consumers want to buy Chinese goods,they will

Due to a recession in the US,the average rate of return on investments is likely to fall causing the demand for US dollar to ​

​A widget costs $50 in the US and CAD$53 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

​A weaker peso,relative to the US dollar,causes the demand for Mexican exports to_______ and US imports to ________

​If the Chinese Yuan devalues against the US dollar,then

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Holding other things constant,if the Japanese Yen,appreciates,it makes the imports to Japan

Holding other things constant,if the Japanese Yen,depreciates,it makes the Japanese products

If the Chinese Yuan devalues against the US dollar,then

If the Chinese Yuan devalues against the US dollar,then

Holding other things constant,an increase in the inflation rate in the US compared to China may cause the demand for dollar to ___ and the supply for dollar to .

In the case where interest rates are lower in Japan,which of the following is an example of a "carry trade"

In order for bubbles to occur,expectations of a price increase usually_demand and supply

If Chinese consumers want to buy US goods,they will

Currency devaluation _import consumers because

The purchasing power parity predicts that if the price level in the US falls relative to Mexico,

Currency devaluation export producers because_

The US is experiencing a technological boom.Relative to the other countries with lower technological growth,we expect to see the dollar

Holding other things constant,decreases in the price level in the US will

Currency devaluations hurt consumers because they make imports ________ expensive

An American consumer wants to buy a Swiss watch.The exchange rate is 1USD=0.89 CHF(Swiss Francs).The watch costs 100 Swiss Francs.How much would it cost him in dollars?

If US consumers want to buy Chinese goods,they will

Due to a recession in the US,the average rate of return on investments is likely to fall causing the demand for US dollar to

A widget costs $50 in the US and CAD$53 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

A weaker peso,relative to the US dollar,causes the demand for Mexican exports to_ and US imports to __

If the Chinese Yuan devalues against the US dollar,then