Question 1

If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports​

Accepted Answer

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

Question 2

​Holding other things constant,increases 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 3

​US Exports
After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

Accepted Answer

The demand for American goods by Europea

Question 4

​A widget costs $1000 in the US and CAD$1200 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 5

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

Accepted Answer

A) ​Increase borrowing in the US,convert to Canadian dollars and invest in Canada 
B) Increase borrowing in the US and invest in the US 
C) Increase borrowing in Canada,convert to dollars and invest in the US 
D) ​Increase borrowing in Canada and invest in Canada 
A) ​Increase borrowing in the US,convert to Canadian dollars and invest in Canada 
B) Increase borrowing in the US and invest in the US 
C) Increase borrowing in Canada,convert to dollars and invest in the US 
D) ​Increase borrowing in Canada and invest in Canada

Question 6

​An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Accepted Answer

A) ​$21,000 
B) $6,800 
C) $12,000 
D) ​Need more information 
A) ​$21,000 
B) $6,800 
C) $12,000 
D) ​Need more information

Question 7

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling 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 8

Due to a boom in the US,the average rate of return on investments is likely to rise 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 9

​In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

Accepted Answer

A) ​The demand for Canadian dollars 
B) The demand for US Dollars 
C) The supply of US dollars 
D) ​None of the above 
A) ​The demand for Canadian dollars 
B) The demand for US Dollars 
C) The supply of US dollars 
D) ​None of the above

Question 10

According to the purchasing power parity,if the price level in the US rises 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) ​None of the above 
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) ​None of the above

Question 11

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n)________ in the demand of US dollars and a(n)_________in the demand of the Chinese Yuan.​

Accepted Answer

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

Question 12

The term to describe one currency in terms of another is called​

Accepted Answer

A) ​The interest rates 
B) The market price 
C) The inflation rate 
D) ​The exchange rate 
A) ​The interest rates 
B) The market price 
C) The inflation rate 
D) ​The exchange rate

Question 13

When interest rates fall,people are​

Accepted Answer

A) ​More likely to borrow 
B) Less likely to borrow 
C) Not likely to change borrowing patterns 
D) ​None of the above 
A) ​More likely to borrow 
B) Less likely to borrow 
C) Not likely to change borrowing patterns 
D) ​None of the above

Question 14

​Holding other things constant,if the Japanese Yen,appreciates,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 15

​An expectation of a price increase in the future would cause consumers to______ and producers to_____

Accepted Answer

A) ​Delay consumption;delay production 
B) Delay production;accelerate production 
C) Accelerate consumption;delay production 
D) ​Accelerate consumption;accelerate production 
A) ​Delay consumption;delay production 
B) Delay production;accelerate production 
C) Accelerate consumption;delay production 
D) ​Accelerate consumption;accelerate production

Question 16

​In the market for Canadian dollars measured in US dollars,the supply of US dollars is

Accepted Answer

A) ​The supply of Canadian dollars 
B) The demand for Canadian Dollars 
C) The demand for US dollars 
D) ​None of the above 
A) ​The supply of Canadian dollars 
B) The demand for Canadian Dollars 
C) The demand for US dollars 
D) ​None of the above

Question 17

​A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

Accepted Answer

A) ​The good costs more in the US 
B) The good costs more in Mexico 
C) The good costs the same across the two countries 
D) ​None of the above 
A) ​The good costs more in the US 
B) The good costs more in Mexico 
C) The good costs the same across the two countries 
D) ​None of the above

Question 18

​Currency devaluations help suppliers because they make exports ________ 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 19

​A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs).The laptop costs $800.How much would the laptop cost him in Swiss Francs?

Accepted Answer

A) ​1200 Francs 
B) 1160Francs 
C) 890Francs 
D) ​712 Francs 
A) ​1200 Francs 
B) 1160Francs 
C) 890Francs 
D) ​712 Francs

Question 20

​When interest rates go up,people are

Accepted Answer

A) ​More likely to borrow 
B) Less likely to borrow 
C) Does not affect a person's consumption 
D) ​None of the above 
A) ​More likely to borrow 
B) Less likely to borrow 
C) Does not affect a person's consumption 
D) ​None of the above

Exam 10: Foreign Exchange, Trade, and Bubbles

If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports​

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

​US Exports After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

​A widget costs $1000 in the US and CAD$1200 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

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

​An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling to __________.​

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

​In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

According to the purchasing power parity,if the price level in the US rises relative to Mexico​

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n)________ in the demand of US dollars and a(n)_________in the demand of the Chinese Yuan.​

The term to describe one currency in terms of another is called​

When interest rates fall,people are​

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

​An expectation of a price increase in the future would cause consumers to______ and producers to_____

​In the market for Canadian dollars measured in US dollars,the supply of US dollars is

​A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

​Currency devaluations help suppliers because they make exports ________ expensive

​A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs).The laptop costs $800.How much would the laptop cost him in Swiss Francs?

​When interest rates go up,people are

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If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports

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

US Exports After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

A widget costs $1000 in the US and CAD$1200 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

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

An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to ___ and the supply for Shilling to .

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

In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

According to the purchasing power parity,if the price level in the US rises relative to Mexico

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n) in the demand of US dollars and a(n)_in the demand of the Chinese Yuan.

The term to describe one currency in terms of another is called

When interest rates fall,people are

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

An expectation of a price increase in the future would cause consumers to__ and producers to_

In the market for Canadian dollars measured in US dollars,the supply of US dollars is

A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

Currency devaluations help suppliers because they make exports ________ expensive

A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs).The laptop costs $800.How much would the laptop cost him in Swiss Francs?

When interest rates go up,people are