Chapter 18 International Trade and Finance

| November 9, 2018

3)
If the price of watermelons is 5 pesos in Argentina and the exchange rate is 4
pesos per dollar, then what is the dollar price of watermelons?
A)
$0.75
B)
$0.80
C)
$1.25
D)
$2.00

4)
If the price of papayas is 12 baht in Thailand and the exchange rate is 30 baht
per dollar, then what is the dollar price of papayas?
A)
$0.40
B)
$2.50
C)
$2.90
D)
$26.00

5)
If the yen to dollar exchange rate moves from 105 to 115 yen per dollar, then
the dollar has ________ and the yen has ________.
A)
depreciated; depreciated
B)
depreciated; appreciated
C)
appreciated; depreciated
D)
appreciated; appreciated

6)
If the dollar to euro exchange rate moves from 1.1 to 0.9 dollars per euro,
then the dollar has ________ and the euro has ________.
A)
depreciated; depreciated
B)
depreciated; appreciated
C)
appreciated; depreciated
D)
appreciated; appreciated

7)
An appreciation is
A)
a decrease in the value of currency.
B)
a decrease in the trade deficit.
C)
an increase in the trade surplus.
D)
an increase in the value of currency.

8)
A depreciation is
A)
a decrease in the value of currency.
B)
a decrease in the trade deficit.
C)
an increase in the trade surplus.
D)
an increase in the value of currency.

9)
If the dollar depreciates against the British pound, U.S. goods sold in
________ would become less expensive and British goods sold in ________ would
become more expensive.
A)
the United States; the United States
B)
the United States; Great Britain
C)
Great Britain; Great Britain
D)
Great Britain; the United States

10)
If the dollar depreciates against the yen, U.S. goods sold in ________ would
become less expensive and Japanese goods sold in ________ would become more
expensive.
A)
the United States; the United States
B)
the United States; Japan
C)
Japan; Japan
D)
Japan; the United States

11)
As the Indian rupee depreciates relative to the dollar, total spending on
Indian goods and assets will increase. Therefore, in the foreign exchange
market, the
A)
supply curve of dollars is upward sloping.
B)
demand curve for dollars is upward sloping.
C)
supply curve of euros is downward sloping.
D)
demand curve for euros is upward sloping.

12)
As the dollar depreciates relative to the Russian ruble, U.S. goods become
cheaper for Russians to purchase. Therefore, in the foreign exchange market,
the
A)
supply curve of dollars is downward sloping.
B)
demand curve for dollars is downward sloping.
C)
supply curve of euros is downward sloping.
D)
demand curve for euros is upward sloping.

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