76.
Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars
given the following situation, ceteris paribus: The Japanese remove some tariffs on American goods.
77.
Refer to Figure 36.3 for the dollar-Swiss franc foreign exchange market. Which of the following is true?
78.
Suppose the supply of dollars increased from S1 to S2 in Figure 36.3. As a result of this change,
79.
Suppose the supply of dollars decreased from S2 to S1 in Figure 36.3. As a result of this change,
80.
Refer to Figure 36.4 for the dollar-yen foreign exchange market. A decrease in demand from D1 to D2
could have been caused by
81.
As a result of an increase in demand from D2 to D1 in Figure 36.4, ceteris paribus, the price of a $40,000
U.S. computer system, in terms of Japanese yen, would: =
82. There is resistance to exchange rate fluctuations because changes in the value of a currency are likely to cause
all of the following except
83. Which of the following is not likely to occur because of exchange rate fluctuations?
84. The fact that the United States has become the world’s largest debtor nation is an indication that
85. The inflow of foreign investment into the United States
A. Signals a lack of confidence in the U.S. economy.
86. A mechanism for fixing exchange rates is the
A. Flexible exchange standard.
87. Suppose the U.S. dollar is defined by law as being equal to 0.1 ounce of gold. Further suppose the British
pound is defined as being equal to 0.05 ounce of gold. The implied exchange rate between the pound and the
dollar is
88.
(p. $$pag
eTag$$)
A gold standard has the advantage of
89. Ceteris paribus, if Americans decide they want to drive more German-made cars, this causes the ________
German currency to _______.
90. Ceteris paribus, if the French decide they want to drink more Chinese-grown tea, this causes the ________
Chinese currency to _______.
A. supply of; increase
91. Ceteris paribus, if Canadians decide they want to eat more U.S.-grown soybeans, this causes the ________
U.S. currency to _______.
A. supply of; decrease
92. A major problem with countries setting fixed exchange rates for their currencies is
A. Some participating countries are likely to experience continuing balance–of-payments deficits.
93. Because of the United States’long-standing trade deficit with Japan, the supply of U.S. dollars in Japan has
increased. Which of the following is true about this situation?
A. Trade restrictions on Japanese imported goods are ultimately the only way to reduce the trade deficit. B.
94. The amount by which the quantity demanded exceeds the quantity supplied at a given price is a
95. An excess demand for foreign currency at current exchange rates is known as a
96. Excess demand for a specific foreign currency, such as the pound, implies a
A. Capital account surplus for the United States.
97. Ceteris paribus, with a fixed exchange rate, if Americans decide to buy more Japanese-made television
sets, this causes a market ________ of Japanese currency and creates a balance–of-payments ________
for the United States.
98. In a fixed exchange rate system,
A. Excess demand for a currency is eliminated by using foreign exchange reserves to increase demand.
99. Under a system of fixed exchange rates where the foreign exchange market is in equilibrium and neither
country has a balance-of-payments deficit or surplus, an increase in imports of French goods by Japanese
consumers, ceteris paribus, would result in a
100. Under a system of fixed exchange rates, excess demand by Germans for the Swiss franc represents a
101. An excess demand for domestic currency at current exchange rates is known as a
A. Balance-of–payments deficit.
than leaving it, which creates a balance–of-payments surplus.
102. Ceteris paribus, with a fixed exchange rate, if people in Argentina decide to buy more Russian oil, this causes a
market ________ of Russian currency and creates a balance–of-payments ________ for Russia.
A. surplus; deficit
103. Foreign exchange reserves are
104. Suppose that at the prevailing euro-dollar exchange rate there is an excess demand for dollars. To
stabilize exchange rates, the United States might
A. Raise taxes.
105. Suppose that at the prevailing yen-dollar exchange rate there is an excess demand for dollars. To
stabilize exchange rates, the United States might
A. Lower taxes.
106. A balance-of-payments surplus for the United States can be corrected by
107. A country could correct a balance-of-payments surplus by
108. A balance-of-payments surplus can be reduced with
110. When exchange rates are flexible, they are
A. Determined by proclamation of the monetary authorities of a country.
111. With flexible exchange rates