Exam 9: The Exchange Rate and the Balance of Payments

Which international account is used to record payments for imports,receipts from exports,net interest paid abroad and net transfers?

Exports of U.S.goods creates a ________ U.S.dollars and creates a ________ foreign currencies.

On the island country of Sunshine where the unit of currency is fish,net exports are 50 fish,saving is 250 fish,net taxes are 100 fish,and the government budget deficit is 175 fish.What is the value of investment?

In the market for international loans,most countries,including the United States,are net borrowers.

The private sector balance is equal to ________.

Today the U.S.dollar is worth 1.5 Canadian dollars.Because of changes in economic conditions,people come to believe that by the end of the month the U.S.dollar will be worth 1.2 Canadian dollars.This belief

Over a month in late 2008,the Federal Reserve Bank reduced the interest rate by 1 percentage point.Given that the United States operates under a ________ exchange rate regimes,the primary purpose of these changes was ________ exchange rate of each currency.

If the United States sells beef to Japan,the U.S.beef producer is paid with

Investor Expected future value of a dollar (francs per dollar) Investor A 120 Investor B 100 Investor C 85 -Using the table above,if the current market value of the dollar is 90 francs,

Component Amount (billions of dollars) Government expenditure, G 700 Net taxes, T 600 Investment, I 350 Savings, S 500 -In the table above,what do net exports equal?

The nominal exchange rate is

-In the above figure,suppose the demand for dollars temporarily increases so that the demand curve shifts to D₁.To maintain the target exchange rate,the Fed

The country of Pimm exports $500 billion worth of goods and services and imports $400 billion worth of goods and services.Net interest income paid abroad is $50 billion and net transfers are $0.The current account balance is ________.

A debtor nation means a nation

If the exchange rate falls from 120 yen per dollar to 100 yen per dollar,the dollar has ________ and the yen has ________.

If the Fed raises the U.S.interest rate,the demand for dollars ________ and the exchange rate ________.

Hyundai is a large South Korean company that produces finished steel products.Hyundai plans to buy raw steel from U.S.Steel.As a result,the

Suppose the exchange rate of the U.S.dollar was 1.50 British pounds = $1.00 (U.S.) on Wednesday,and on the following Monday the exchange rate was $.75 (U.S.) = 1.00 British pound.Which of the following best describes what happened between Wednesday and the following Monday?

If portable disk players made in China are imported into the United States,the Chinese manufacturer is paid with

In the foreign exchange market,how does each of the following influences affect the demand for dollars and the demand curve for dollars? a) an increase in the exchange rate. b) an increase in the U.S.interest rate. c) a fall in the expected future exchange rate.