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Which of the following is true? O f the European Central Bank sells euros and buys pounds, the U.S. dollar will appreciate. O f the Chinese government imposes restrictions on the flow of capital from China to the U.S, the U.S. dollar will appreciate. O f the Federal Reserve Bank of the U.S. buys Mexican pesos and sells dollars, the U.S. dollar will appreciate. O If the Japanese central bank sells yen and buys U.S. dollars, the U.S. dollar will appreciate.

Which of the following would increase the current account balance of the United States? O an increase in the amount of money the U.S. government sends in foreign aid to other countries O an increase in imports an increase in the amount of income U.S. companies pay out to foreigners who own investments in the United States. O an increase in net exports

On the foreign exchange market, an increase in a country's exchange rate O a. decreases the demand for its currency and shifts the demand curve leftward. O b. decreases the quantity demanded of its currency and leads to a movement up along the demand curve. decreases the demand for its currency and shifts the demand curve rightward. O d. increases the quantity demanded of its currency and leads to a movement down along the demand curve. O . increases the quantity demanded of its currency and leads to a movement up along the demand curve.

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Suppose that Japan has adopted a floating exchange rate for its currency, the Japanese Yen. When the Japanese central bank conducts monetary policy that raises interest rates in Japan, the Demand for Japanese Yen will and the Japanese Yen will O increase; appreciate O decrease; appreciate O increase; depreciate O decrease; depreciate

If yesterday €1 traded for US$1.06 and today €1 trades for US$1.05, we would say that O the US dollar has appreciated relative to the euro the euro and US dollar have both appreciated relative to one another O the US dollar has depreciated relative to the euro the euro and US dollar have both depreciated relative to one another

Other things remaining the same, the higher the expected future exchange rate, (Hint: Think about the demand or supply of dollars in the foreign exchange market) O the smaller is the expected profit from selling U.S. dollars today, so the smaller is the supply of dollars today O the demand curve for dollars will decrease and shift to the left the greater is the demand for U.S. assets and the greater is the demand for dollars on the foreign exchange market O None of the above are correct.

View the data below for the exchange rate between the US dollar and the Japanese yen.   How many yen could you get per dollar at the earliest date shown on the chart? Explain. How many yen could you get per dollar at the most recent date shown on the chart? Explain. Has the dollar appreciated or depreciated in value over time? Explain.

QUESTION 6 From 1980 to 2000, the dollar-yen exchange rate fell from 240 yen/dollar to 102 yen/dollar, while the pound-dollar exchange rate fell from 2.22 dollars/pound to 1.62 dollars/pound. As a result, O A. the dollar appreciated relative to the yen, but depreciated relative to the pound O B. the dollar depreciated relative to the yen, but appreciated relative to the pound OC. the dollar appreciated relative to both the yen and the pound O D. the dollar depreciated relative to both the yen and the pound

A balance of payments crisis is O a sharp change in foreign reserves sparked by a change in expectations about domestic production. O a sharp change in foreign reserves sparked by a change in expectations about the level of imports. O a sharp change in interest rates sparked by a change in expectations about the level of exports. a sharp change in foreign reserves sparked by a change in expectations about the future exchange rate.

If countries A and B are the only two countries in the world, then if the currency of country A appreciates, the currency of country B... O a. May appreciate or depreciate, depending on the elasticity of demand for the exports of country A. O b. May appreciate or depreciate, depending on the volume of trade between the two countries. O c. Must appreciate. O d. Can appreciate relative to other countries. O e. Must depreciate.

Question 2 of 25 In which situation is a country most likely to choose a flexible exchange rate for its currency? O A. A country believes that its currency will be in low demand in global markets. B. A country worries that the value of its currency could rise and fall unpredictably. C. A country has a reputation for having a strong and stable economy over time. O D. A country wants to make sure that its currency is stable in all economic situations.