Exam 9: The Exchange Rate and the Balance of Payments

If the U.S. government increased its holdings of British pounds, definitely

In the foreign exchange market, how does a change in the expected future U.S. exchange rate affect the demand for dollars?

-Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from Canada, financing that increase by borrowing from Canada. The current account deficit is now ________ and the capital and financial account surplus is now ________.

The U.S. dollar will depreciate in value if

Since the mid-1980s, the United States has been a net ________ and a ________ nation.

-Using the table above, if the current market value of the dollar is 90 francs

The Fed ________ intervene in the foreign exchange market by supplying dollars and the Fed ________ intervene in the foreign exchange market by demanding dollars.

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. The private sector has a ________.

Suppose $1 will buy 150 yen in January and 200 yen the following December. This change could have occurred if the

If 100 Japanese yen buy more U.S. dollars today than yesterday, the dollar has ________ and the yen has ________.

In June 2008, the dollar bought 1.6 Brazilian reals and in October, the dollar bought 2.4 reals. This resulted in a

Which of the following is recorded in the U.S. balance of payments account? I.foreign investment in the United States II.U.S. investment abroad III.the U.S. government deficit or surplus

-Using the data in the above table, if exports = $1,150 billion and the private sector runs a surplus of $300 billion, the government sector will run

A small country is an international borrower and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international borrowing ________.

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

The real exchange rate is the

A debtor nation means a nation

Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital account changed?

In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account while Bank of America offered 2 percent. This difference means that

The demand for Mexican tomatoes by an American food grocery chain creates a