Exam 33: Exchange Rates and the Balance of Payments

The U.S. government suspended the convertibility of the dollar into gold in

Flexible exchange rates are determined by

Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to

Suppose the Canadian central bank wants to keep the exchange rate of the Canadian dollar with the U.S. dollar constant over time. An increase in the demand for Canadian goods by American residents will lead the Canadian central bank to

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

The capital account is

If the dollar used to buy 360 yen and now buys 100 yen, there has been

The difference between the exports and imports of goods in a country is referred to as the

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

A surplus item is

All of the following are surplus items in the balance of payments EXCEPT

A nation's foreign exchange reserves consist mainly of

The agency which functions as a "lender of last resort" for national governments is the

If the exchange rate is such that $1 equals 5 Indian rupees, then the price of a rupee is

Foreign exchange risk is

When the supply and demand of currencies in the foreign exchange market determines their relative values, this is known as

The current account is

A hedge is

-Refer to the above figure. Suppose E is the original equilibrium. An increase in the demand for dollars will be reflected in this figure by

Every transaction concerning the importation of goods into the United States constitutes a