Chapter 18 International Trade and Finance

| November 9, 2018

13)
The exchange rate between currencies of different countries is controlled
primarily by ________ in currency markets.
A)
diplomatic relations
B)
supply and demand
C)
tariff rates
D)
the outsourcing agreements

14)
Spending on goods from a country will ________ as the value of its currency
gets cheaper against the U.S. dollar.
A)
decrease
B)
increase
C)
reverse
D)
go to other countries

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Figure 18.2

15)
Referring to Figure 18.2, if the exchange rate is currently 11 pesos per
dollar, then we expect the dollar to ________ and the peso to ________.
A)
depreciate; depreciate
B)
depreciate; appreciate
C)
appreciate; depreciate
D)
appreciate; appreciate

16)
Referring to Figure 18.2, if the exchange rate is currently 14 pesos per
dollar, then we expect the dollar to ________ and the peso to ________.
A)
depreciate; depreciate
B)
depreciate; appreciate
C)
appreciate; depreciate
D)
appreciate; appreciate

17)
Referring to Figure 18.2, the dollar is likely to appreciate if the exchange
rate is either ________ or ________ pesos to the dollar.
A)
10; 11
B)
11; 12
C)
12; 13
D)
13; 14

18)
Referring to Figure 18.2, the dollar is likely to depreciate if the exchange
rate is either ________ or ________ pesos to the dollar.
A)
10; 11
B)
11; 12
C)
12; 13
D)
13; 14

19)
Referring to Figure 18.2, the peso is likely to appreciate if the exchange rate
is either ________ or ________ pesos to the dollar.
A)
10; 11
B)
11; 12
C)
12; 13
D)
13; 14

20)
Referring to Figure 18.2, the peso is likely to depreciate if the exchange rate
is either ________ or ________ pesos to the dollar.
A)
10; 11
B)
11; 12
C)
12; 13
D)
13; 14

21)
Referring to Figure 18.2, U.S. goods will become more expensive in Mexico if
the exchange rate goes from ________ to ________ pesos to the dollar.
A)
12; 11
B)
12; 13
C)
13; 11
D)
14; 10

22)
Referring to Figure 18.2, U.S. goods will become cheaper in Mexico if the
exchange rate goes from ________ to ________ pesos to the dollar.
A)
12; 11
B)
12; 13
C)
11; 13
D)
10; 14

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