Exam 22: The Economic Case for and Against Government: Five Topics Considered

The U.S.dollar has depreciated relative to the Japanese yen if it takes

-Refer to Exhibit 35-4.Under a fixed exchange rate system,at the exchange rate of E₃,the peso is __________ and there is a __________.

The higher the U.S.dollar price per Mexican peso,the __________ Mexican goods are for Americans and the __________ Mexican goods Americans will buy; thus __________ pesos will be demanded.

Research by economists Bloom,Draca,and Van Reenen revealed that imports from China were associated with not only lower consumer goods prices,but also a ______________ cost of inputs for domestic firms,a(n)______________ in the variety of products those domestic firms sold,and a(n)_______________ in U.S.productivity.

Suppose that on Monday,a Big Mac cost $3.00 in the United States and 310 Japanese yen in Japan.On Monday,the exchange rate was $1 = 85 yen.According to the purchasing power parity theory,the yen was __________ by approximately __________ percent.

The U.S.dollar currently serves as the "unit of account" of major global products.

-Refer to Exhibit 35-4.Under a fixed exchange rate system,at the exchange rate of E₁,the dollar is __________ and there is a __________ of pesos.

-Refer to Exhibit 35-5.Based on the information provided in this table,between Monday and Tuesday,the U.S.dollar ____________ against the Thai baht and the baht _____________ against the U.S.dollar.

If the income of U.S.citizens falls relative to the income of Japanese citizens,the dollar will __________ in terms of the yen,and the yen will __________ in terms of the dollar.

If,under a fixed exchange rate system,the dollar price of a Mexican peso is above its equilibrium level,then the

Suppose that the exchange rate between the U.S.dollar and the Mexican peso starts out at $0.11 per peso.If the exchange rate then changes to $0.08 per peso,there will be a(n)__________ in the quantity demanded of dollars by Mexicans,and therefore there will be a(n)__________ in the quantity supplied of pesos to the foreign exchange market.

Some economists have found that U.S.imports of Chinese goods and resources

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

All economists agree that the European Union is an example of a true a optimal currency area.

A "devaluation" occurs when

If,under a fixed exchange rate system,the dollar price of Mexican pesos is below its equilibrium level,then the

If inflation in the United States rises relative to the inflation rate in Mexico,the dollar will __________ in terms of the peso and the peso will __________ in terms of the dollar.

A "revaluation" occurs when

There is a flexible exchange rate system and only two countries in the world,the United States and Mexico.An increase in income growth in Mexico relative to income growth in the United States will cause the

If,under a fixed exchange rate system,the dollar price of a Mexican peso is above its equilibrium level,then the