Exam 9: The Exchange Rate and the Balance of Payments

-The above table gives data for the nation of Sueland. What is the value of net exports?

In the foreign exchange market, a decrease in the exchange rate increases the quantity of dollars supplied.

When the demand for a currency permanently increases, that nation's central bank can maintain its fixed exchange rate indefinitely.

Suppose the exchange rate between the U.S. dollar and the French franc is 0.25 francs per dollar. If a television sells for 100 francs in France, what is the dollar price of the television set?

Purchasing power parity means that the expected exchange rate is such that the returns from investing in two nations are equal.

The current account

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.

A factor determining the supply of U.S. dollars in the foreign exchange market is the

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

When the U.S. exchange rate falls, U.S. goods become ________ to foreign residents and U.S. exports ________.

When the United States imports goods and services from the rest of the world

In the foreign exchange market, which of the following results in a movement along the supply curve of dollars?

Relative to the yen, from 2012-2014 the U.S. dollar

The official settlements account records the change in ________.

-The data in the table above are the U.S. balance of payments. The current account balance is

The law of demand for dollars in the foreign exchange market means that the

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

A factor that helps to determine the demand for the dollar in the foreign exchange market is

As the exchange rate ________, the ________ is the value of U.S. ________.

-Using the data in the above table, if net exports = -$500 billion and the government balances its budget, then