Exam 21: Financial Markets, Saving, and Investment

If the rate of inflation overseas rises relative to the rate of inflation in the United States, U.S. net exports will tend to ____, causing the exchange value of the U.S. dollar to ____.

If interest rates rise in the United States relative to those in the rest of the world, the exchange value of the dollar will tend to appreciate.

If real incomes in foreign nations were growing less rapidly than U.S. real incomes, one would expect that as a result,

Suppose that the exchange rate between Japanese yen and U.S. dollars is originally 130 yen to the dollar. If it then changes to 150 yen to the dollar, imports of Japanese goods into the United States will tend to:

The exchange rate of a currency will increase if the quantity demanded exceeds quantity supplied at the current exchange rate.

The recent flexible exchange rate system developed because of:

Classify each of the following as debits or credits in the U.S. balance of payments. ​ A.Russian tourists travel to United States. B.U.S. gives foreign aid to BosniA C.British investors purchase U.S. government bonds. D.American tourists travel to AustraliA E.Volkswagen earns profits in the United States from its new cars. F.Toyota builds a new plant in Ohio. G.Capital Records sells rock and roll music in Sweden. H.German consumer buy Ronco Vegematics made in United States. I.Procter & Gamble earns profits in their Mexican facility.

The record of all international financial transactions in which a nation has engaged over a year is known as the:

Which of the following would be a debit in the U.S. balance of payments?

If a British student pays her way to attend Harvard University, her actions will:

Whenever there is a surplus in the current account, the capital account:

One of the disadvantages of a fixed exchange rate system is:

Stock in a German corporation can be purchased directly with currency from any other country.

The demand for foreign currency is derived from the demand for that country's goods and services.

If the interest rate in two countries were the same, you would prefer to invest in assets of the country:

Differences among nations in real economic growth rates, real interest rates, and inflation rates will each affect the exchange rates among their currencies.

Fixed exchange rates give countries too much freedom over their monetary policies, thereby threatening higher rates of inflation.

If real interest rates in the United States fell and real interest rates in England rose, we would expect people to:

Critics of flexible exchange rates argue that flexible rates:

Can the U.S. dollar and the euro both appreciate relative to each other?