Exam 19: Exchange Rates and the Balance of Payments

When a Chinese company builds an auto plant in the United States, the immediate result of this Chinese investment in the United States is a ________ item in the U.S. ________ account.

If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then

All of the following are surplus items on the balance of payments accounts EXCEPT

Which of the following items is NOT a deficit item in the balance of payments?

If the foreign exchange rate is one dollar for 10 South African rand, then how many dollars are needed to purchase an item that costs 400 rand?

An appreciation of the U.S. dollar relative to the Japanese yen causes

When the dollar price of a British pound is $0.80, it is correct to state that an American traveling in England will receive ________ pounds per dollar.

Suppose economic stability in the United States increases. This will tend to cause which of the following to occur?

Which of the following is an example of a surplus item on the balance of payments?

Suppose that there is a current account deficit of $250 billion and a capital account surplus of $260 billion. It may be concluded that the

Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand are known as

A problem with the operation of the gold standard in the world economy was that

Suppose U.S. interest rates fall. This reduction in U.S. interest rates will cause which of the following to occur?

The effect that a gift given to a U.S. citizen from a foreign resident will have on the balance of payments is to

The financing of U.S. export transactions, ceteris paribus

If an exporter wants to limit the effect of possible changes in the exchange rate on the value of her exports, then she can adopt a strategy known as

-Use the above figure. At equilibrium, the exchange rate is

The legally established value of a country's monetary unit in terms of another under the Bretton Woods system was called the

Special Drawing Rights are

-Use the above figure. A rightward shift of the demand curve, ceteris paribus, would result in