Question 1

If there is a negative sign in front of transfers for Canada,then

Accepted Answer

A) Canada imported more services than it exported. 
B) the value of Canadian gifts to foreigners exceeded foreign gifts to Canadians. 
C) Canada imported more commercial financial assets than it exported. 
D) Canada had a negative balance of trade. 
A) Canada imported more services than it exported. 
B) the value of Canadian gifts to foreigners exceeded foreign gifts to Canadians. 
C) Canada imported more commercial financial assets than it exported. 
D) Canada had a negative balance of trade. B

Question 2

The gold standard is

Accepted Answer

A) a Type of floating exchange rate system. 
B) a Type of managed flexible exchange rate system. 
C) a Type of fixed exchange rate system. 
D) a purely floating exchange rate system. 
A) a Type of floating exchange rate system. 
B) a Type of managed flexible exchange rate system. 
C) a Type of fixed exchange rate system. 
D) a purely floating exchange rate system. C

Question 3

If Canada looks more economically and politically stable relative to the rest of the world,this will

Accepted Answer

A) decrease the demand for dollars. 
B) increase the demand for dollars. 
C) have no effect on the demand for dollars. 
D) stop all trading between the currencies of Canada and other countries. 
A) decrease the demand for dollars. 
B) increase the demand for dollars. 
C) have no effect on the demand for dollars. 
D) stop all trading between the currencies of Canada and other countries. B

Question 4

The basic purpose of the Bretton Woods meeting was to

Accepted Answer

A) fix prices. 
B) locate the world's supply of gold. 
C) slow down inflation after World War II. 
D) create a new international payment system. 
A) fix prices. 
B) locate the world's supply of gold. 
C) slow down inflation after World War II. 
D) create a new international payment system.

Question 5

If there is a positive sign in front of transfers for Canada,then

Accepted Answer

A) Canada exported more services than it imported. 
B) the value of Canadian gifts to foreigners was less than foreign gifts to Canadians. 
C) Canada imported more commercial financial assets than it exported. 
D) Canada had a positive balance of trade. 
A) Canada exported more services than it imported. 
B) the value of Canadian gifts to foreigners was less than foreign gifts to Canadians. 
C) Canada imported more commercial financial assets than it exported. 
D) Canada had a positive balance of trade.

Question 6

Current account transactions are all payments and gifts that are related to the purchase or sale of

Accepted Answer

A) goods only. 
B) services only. 
C) goods and services only. 
D) goods and services excluding government purchases. 
A) goods only. 
B) services only. 
C) goods and services only. 
D) goods and services excluding government purchases.

Question 7

Explain in detail the difference between fixed and flexible exchange rates.Once completed,with the aid of diagrams explain why monetary policy is ineffective under fixed exchange rates.

Accepted Answer

Begin with a discussion of fixed versus

Question 8

If the exchange rate is such that $1 equal 5 euros,then the price of a euro is

Accepted Answer

A) $5. 
B) $1. 
C) $0.40. 
D) $0.20. 
A) $5. 
B) $1. 
C) $0.40. 
D) $0.20.

Question 9

During 1998,Brasil reported imports of $1,000 million,exports of $1,100 million,foreign investment into the country of $900 million,investment abroad of $1,200 million.Assuming that net interest and net transfers are zero,what is the country's current account balance?

Accepted Answer

The answer of During 1998,Brasil reported imports of $1,000 million,exports...

Question 10

What does it mean when the dollar appreciates? What does it mean when the dollar depreciates?

Accepted Answer

If the dollar appreciates with respect t

Question 11

Canada's balance of payments is likely to improve when

Accepted Answer

A) the inflation rate increases in Canada relative to other countries. 
B) there is an increases in political instability in other countries. 
C) the world demand for Canadian products falls. 
D) the Canadian government increases its spending on foreign aid. 
A) the inflation rate increases in Canada relative to other countries. 
B) there is an increases in political instability in other countries. 
C) the world demand for Canadian products falls. 
D) the Canadian government increases its spending on foreign aid.

Question 12

The demand for foreign currency in Canada is a

Accepted Answer

A) direct demand. 
B) derived demand based on the demand for Canadian products. 
C) derived demand based on the demand for foreign products. 
D) direct demand based on the demand for Canadian dollars. 
A) direct demand. 
B) derived demand based on the demand for Canadian products. 
C) derived demand based on the demand for foreign products. 
D) direct demand based on the demand for Canadian dollars.

Question 13

The management of flexible exchange rates is also called

Accepted Answer

A) a dirty float. 
B) the Bretton Woods system. 
C) a fiscal fix. 
D) a reserve-currency standard. 
A) a dirty float. 
B) the Bretton Woods system. 
C) a fiscal fix. 
D) a reserve-currency standard.

Question 14

The demand for euros is

Accepted Answer

A) determined by how well the euro maintains its value. 
B) a function of the European banking system. 
C) derived from the supply of Canadian dollars. 
D) derived from the demand for European goods. 
A) determined by how well the euro maintains its value. 
B) a function of the European banking system. 
C) derived from the supply of Canadian dollars. 
D) derived from the demand for European goods.

Question 15

With the aid of diagrams,explain how a shift in demand,a shift in supply,and market determinants affect the Canadian exchange rate.

Accepted Answer

A complete discussion would include:
1.A

Question 16

The exchange rate system in use since the early 1970s is best described as a

Accepted Answer

A) dollar standard. 
B) adjustable peg system. 
C) fixed exchange system. 
D) freely floating or managed "dirty" floating exchange rate system. 
A) dollar standard. 
B) adjustable peg system. 
C) fixed exchange system. 
D) freely floating or managed "dirty" floating exchange rate system.

Question 17

Define the three categories of balance of payments transactions.

Accepted Answer

Current account transactions relate to s

Question 18

In dealing with fixed and flexible exchange rates,what is meant by a dirty floating rate.

Accepted Answer

A dirty float is a system in b

Question 19

An increase in the value of a domestic currency in terms of other currencies is known as

Accepted Answer

A) an appreciation. 
B) a depreciation. 
C) a flexible exchange rate. 
D) a discount rate. 
A) an appreciation. 
B) a depreciation. 
C) a flexible exchange rate. 
D) a discount rate.

Question 20

If the current account is in deficit,we know that

Accepted Answer

A) the merchandise trade balance is also in deficit. 
B) the merchandise trade balance is in surplus. 
C) the capital account is in surplus. 
D) there is a statistical discrepancy in the surplus. 
A) the merchandise trade balance is also in deficit. 
B) the merchandise trade balance is in surplus. 
C) the capital account is in surplus. 
D) there is a statistical discrepancy in the surplus.

If there is a negative sign in front of transfers for Canada,then

The gold standard is

If Canada looks more economically and politically stable relative to the rest of the world,this will

The basic purpose of the Bretton Woods meeting was to

If there is a positive sign in front of transfers for Canada,then

Current account transactions are all payments and gifts that are related to the purchase or sale of

Explain in detail the difference between fixed and flexible exchange rates.Once completed,with the aid of diagrams explain why monetary policy is ineffective under fixed exchange rates.

If the exchange rate is such that $1 equal 5 euros,then the price of a euro is

During 1998,Brasil reported imports of $1,000 million,exports of $1,100 million,foreign investment into the country of $900 million,investment abroad of $1,200 million.Assuming that net interest and net transfers are zero,what is the country's current account balance?

What does it mean when the dollar appreciates? What does it mean when the dollar depreciates?

Canada's balance of payments is likely to improve when

The demand for foreign currency in Canada is a

The management of flexible exchange rates is also called

The demand for euros is

With the aid of diagrams,explain how a shift in demand,a shift in supply,and market determinants affect the Canadian exchange rate.

The exchange rate system in use since the early 1970s is best described as a

Define the three categories of balance of payments transactions.

In dealing with fixed and flexible exchange rates,what is meant by a dirty floating rate.

An increase in the value of a domestic currency in terms of other currencies is known as

If the current account is in deficit,we know that

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

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Exam 17: Exchange Rates and the Balance of Payments

If there is a negative sign in front of transfers for Canada,then

The gold standard is

If Canada looks more economically and politically stable relative to the rest of the world,this will

The basic purpose of the Bretton Woods meeting was to

If there is a positive sign in front of transfers for Canada,then

Current account transactions are all payments and gifts that are related to the purchase or sale of

Explain in detail the difference between fixed and flexible exchange rates.Once completed,with the aid of diagrams explain why monetary policy is ineffective under fixed exchange rates.

If the exchange rate is such that $1 equal 5 euros,then the price of a euro is

During 1998,Brasil reported imports of $1,000 million,exports of $1,100 million,foreign investment into the country of $900 million,investment abroad of $1,200 million.Assuming that net interest and net transfers are zero,what is the country's current account balance?

What does it mean when the dollar appreciates? What does it mean when the dollar depreciates?

Canada's balance of payments is likely to improve when

The demand for foreign currency in Canada is a

The management of flexible exchange rates is also called

The demand for euros is

With the aid of diagrams,explain how a shift in demand,a shift in supply,and market determinants affect the Canadian exchange rate.

The exchange rate system in use since the early 1970s is best described as a

Define the three categories of balance of payments transactions.

In dealing with fixed and flexible exchange rates,what is meant by a dirty floating rate.

An increase in the value of a domestic currency in terms of other currencies is known as

If the current account is in deficit,we know that

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Filters