Flexible exchange rate systems occur when

Assignment Help Microeconomics
Reference no: EM13685420

1. Flexible exchange rate systems occur when:

There are differences between the values of currencies.

U.S. consumers pay different prices for different countries' goods and services.

U.S. dollars flow to other countries.

Exchange rates are determined by the law of supply and demand.

2. If the demand curve for dollars shifts to the right:

The values of all currencies have depreciated.

The values of all currencies have appreciated.

The dollar has appreciated.

The dollar has depreciated.

3. If the supply curve for dollars shifts to the right relative to the British pound:

The value of the dollar has appreciated.

The value of the dollar has depreciated.

The cost of U.S. goods to the British has increased.

The cost of British goods to Americans has decreased.

4. With a system of flexible floating exchange rates, a United States trade deficit with Japan will lead to:

A decrease in the balance of gold held by the United States

An increase in the balance of gold held by Japan

An appreciation of the dollar in relation to the yen

A depreciation of the dollar in relation to the yen

5. When the dollar appreciates, it means that:

It takes more dollars to purchase foreign currencies.

It takes more dollars to purchase a fixed amount of gold.

It takes fewer dollars to purchase foreign currencies.

It takes fewer dollars to purchase a fixed amount of gold.

6. Which of the following is a likely consequence when the dollar declines in value against other currencies?

The U.S. current account trade deficit increases.

The U.S. current account trade deficit remains constant.

The U.S. current account trade deficit declines.

U.S. products become more expensive for foreigners.

7. If fewer dollars are needed to buy a German mark:

Americans will buy fewer German goods.

Americans will buy more German goods.

German goods become relatively more expensive to Americans.

Americans buy a smaller amount of German marks.

8. Other things equal, higher U.S. income would:

Reduce the supply of dollars, causing the dollar to depreciate.

Reduce the supply of dollars, causing the dollar to appreciate.

Increase the supply of dollars, causing the dollar to depreciate.

Increase the supply of dollars, causing the dollar to appreciate.

9. With a system of floating exchange rates, holding everything else constant, a Mexican trade deficit with the United States will result in:

An increase in Mexico’s domestic money supply

More expensive Mexican imports into the United States.

A reduction in Mexico’s inflationary pressures

An appreciation of the dollar in relation to the peso

10. Consider the impact on Ford autos produced in the U.S. and exported to Mexico, when the Mexican peso depreciated in the mid-1990s. The most likely consequences for Ford is:

Ford will buy more parts used in auto production which are made in Mexico.

Ford will shut down any production facilities it has in Mexico.

Production costs for Ford will increase because of the peso depreciation.

The demand for Ford's in Mexico will increase.

11. Which of the following was a consequence to the Mexican economy of the mid-1990s peso collapse?

An increase in GDP growth

A reduction in the current account deficit

A decrease in import prices

Expansionary monetary and fiscal policies to increase economic growth

12. If Japanese banks sell their U.S. assets such as Treasury debt, which of the following is true:

Dollars will be converted to yen through the capital account, and holding everything else constant, the dollar will depreciate.

Dollars will be converted to yen through the current account, and holding everything else constant, the dollar will depreciate.

Dollars will be converted to yen through the capital account, and holding everything else constant, the dollar will appreciate.

Dollars will be converted to yen through the current account, and holding everything else constant, the dollar will appreciate.

13. When a country's real exchange rate appreciates:

Its nominal exchange must have also appreciated.

Foreign goods become more expensive in terms of domestic purchasing power.

It could result if the domestic exchange rate is pegged in terms of the foreign exchange rate and foreign inflation rates are relatively high compared to domestic inflation rates.

It could result if the domestic exchange rate is pegged in terms of the foreign exchange rate and domestic inflation rates are relatively high compared to foreign inflation rates.

Reference no: EM13685420

Questions Cloud

Show ethical scholarship in accurate representation : Demonstrated ethical scholarship in accurate representation and attribution of sources, displayed accurate spelling, grammar, and punctuation. Create a scaffold for your literature review.
Is there evidence to support the company claim : Is there evidence to support the company's claim?
The approaches will you be most inclined to choose : Which of the approaches will you be most inclined to choose and why?
What are the variance and standard deviation : What are the variance and standard deviation?
Flexible exchange rate systems occur when : Flexible exchange rate systems occur when: If the supply curve for dollars shifts to the right relative to the British pound: Which of the following is a likely consequence when the dollar declines in value against other currencies? With a system of ..
How listen to music : Suppose 10 teenagers are selected randomly to be interviewed about how they listen to music.
Estimates to test hypotheses about regression coefficients : Agree or Disagree, and Describe: When estimating a regression with a binary dependent variable, it is necessary to use heteroskedasticity-robust standard error estimates to test hypotheses about the regression coefficients.
Pricing problem-what would be your expected profits per unit : Presume as a manager of a profitable department store you are confronted with a pricing problem. You have two kinds of customers: a high-end type that are willing to pay a price of $20 for a pair of Levis Jeans, and a low-end type consumer that are w..
Specializes in online security software development : A company that specializes in online security software development wants to have $85 million available in three years to pay stock dividends. How much money must the company set aside now in an account that earns interest at a rate of 8% per year, co..

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd