Question 1

If the Canadian dollar appreciates,cross-border shopping by Canadians will increase.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to the graph above to answer this question.Under a system of flexible exchange rates,what will the shift in demand from D1 to D2 do?

Accepted Answer

A) Cause Canadian exports to decline and its imports to rise. 
B) Cause the Canadian dollar to depreciate. 
C) Cause the franc to depreciate. 
D) Cause the Canadian dollar to appreciate. 
E) Cause a balance of payments deficit in Switzerland. 
A) Cause Canadian exports to decline and its imports to rise. 
B) Cause the Canadian dollar to depreciate. 
C) Cause the franc to depreciate. 
D) Cause the Canadian dollar to appreciate. 
E) Cause a balance of payments deficit in Switzerland.

Question 3

-Refer to the graph above to answer this question.If the fixed exchange rate is fixed at OE,what will be the result of the shift in demand from D1 to D2?

Accepted Answer

A) An increase in Canada's stocks of international monetary reserves. 
B) A Swiss balance of payments deficit. 
C) A Canadian balance of payments deficit. 
D) A Canadian balance of payments surplus. 
E) The Canadian dollar to depreciate. 
A) An increase in Canada's stocks of international monetary reserves. 
B) A Swiss balance of payments deficit. 
C) A Canadian balance of payments deficit. 
D) A Canadian balance of payments surplus. 
E) The Canadian dollar to depreciate.

Question 4

If a Panamanian balboa is worth 0.20 Canadian dollars,then a Canadian dollar is worth 4 balboas.

Accepted Answer

A) True 
 B)False

Question 5

Advocates of the fixed exchange rate system argue all of the following except one.Which is the exception?

Accepted Answer

A) Fixed exchange rates are not vulnerable to the actions of speculators. 
B) Fixed exchange rates introduced greater future certainty into trading which will increase the volume of international trade. 
C) Fixed exchange rates are able to adjust rapidly so as to attract foreign investment. 
D) With fixed exchange rates,export and import industries do not suffer severe and unpredictable fluctuations in business. 
E) The certainty that comes from fixed exchange rates increases the volume of international investment. 
A) Fixed exchange rates are not vulnerable to the actions of speculators. 
B) Fixed exchange rates introduced greater future certainty into trading which will increase the volume of international trade. 
C) Fixed exchange rates are able to adjust rapidly so as to attract foreign investment. 
D) With fixed exchange rates,export and import industries do not suffer severe and unpredictable fluctuations in business. 
E) The certainty that comes from fixed exchange rates increases the volume of international investment.

Question 6

What is the theory of purchasing power parity?

Accepted Answer

A) A theory suggesting that exchange rates will change so as to equate the purchasing power of each currency. 
B) A theory suggesting that exchange rates tend to diverge over time. 
C) A theory suggesting that all currencies will be,in time,at par. 
D) A formula used to calculate the exchange rate of one currency for another. 
A) A theory suggesting that exchange rates will change so as to equate the purchasing power of each currency. 
B) A theory suggesting that exchange rates tend to diverge over time. 
C) A theory suggesting that all currencies will be,in time,at par. 
D) A formula used to calculate the exchange rate of one currency for another.

If the Canadian dollar appreciates,cross-border shopping by Canadians will increase.

-Refer to the graph above to answer this question.Under a system of flexible exchange rates,what will the shift in demand from D1 to D2 do?

-Refer to the graph above to answer this question.If the fixed exchange rate is fixed at OE,what will be the result of the shift in demand from D1 to D2?

If a Panamanian balboa is worth 0.20 Canadian dollars,then a Canadian dollar is worth 4 balboas.

Advocates of the fixed exchange rate system argue all of the following except one.Which is the exception?

What is the theory of purchasing power parity?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 11: Exchange Rates and the Balance of Payments

If the Canadian dollar appreciates,cross-border shopping by Canadians will increase.

-Refer to the graph above to answer this question.Under a system of flexible exchange rates,what will the shift in demand from D1 to D2 do?

-Refer to the graph above to answer this question.If the fixed exchange rate is fixed at OE,what will be the result of the shift in demand from D1 to D2?

If a Panamanian balboa is worth 0.20 Canadian dollars,then a Canadian dollar is worth 4 balboas.

Advocates of the fixed exchange rate system argue all of the following except one.Which is the exception?

What is the theory of purchasing power parity?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters