Econ 300

Front 1

all else equal if canada raises its interest rates

Back 1

the US demand for Canadian dollars will increase

Front 2

If the supply of Brittish pounds offered for sale on the market for foreign exchange increases the equilibrium number of foreign exchange transaction wil _____ and the Us dollar wil ______

Back 2

Increase, appreciate

Front 3

A US restaurant that must pay 200 euros for french wine upon its delivery in 90 days can remove the risk of the dollar depreciating over that time by

Back 3

agreeing to buy Euros on the forward market

Front 4

If the US trade deficit increases the demand for foriegn exchange wil _____ and the US dollar will ______

Back 4

Increase, depreciate

Front 5

If the UNited States dollar depreciates then

Back 5

United States will export more

Front 6

If the UNited States dollar appreciates then

Back 6

United States will export less

Front 7

If government spending is less than tax revenue and domestic savings is less than investment then the current account is in a

Back 7

Not enough information to tell

Front 8

If government spending is more than tax revenue and domestic savings is less than investment then the current account is in a

Back 8

Not enough information to tell

Front 9

If the United States experiences an increase in real income growth relative to the rest of the world it will cause the value of the dollar to

Back 9

Depreciate since we will buy fewer imports

Front 10

The United States is currently running a trade ________ with the rest of the world. This implies that the United States is ____________

Back 10

Deficit, borrowing money from the rest of the world

Front 11

Which of the following statements is true

Back 11

Since WWII the US has gone from being a net creditor to currently being a net debtor to the rest of the world

Front 12

On the US balance of payments statement, investment income received from the ownership of foreign assets is classified primarily as

Back 12

A current account credit

Front 13

An American retired couple flies from Seattle to Tokyo on Japan Airline. The primary classification of this transaction is a

Back 13

Current account debt

Front 14

An American buy stock in Bavarian Motor Works. The primary classification of this transaction is a

Back 14

Financial account debit

Front 15

Credit (+) items in the balance of payments correspond to anything that

Back 15

involve receipts of payments from foreigners

Front 16

When all of the debit or credit items in the balance of payments are combined

Back 16

The balance of payments sums to zero

Front 17

An appreciation of the dollar refers to a

Back 17

fall in the dollar price of foreign currency

Front 18

Holding other things constant higher interest rates in the US will cause the dollar to _____ and higher rates of inflation in the US will cause the dollar to _________

Back 18

appreciate, depreciate

Front 19

Low real interest rates in the United States tend to

Back 19

Decrease the demand for dollars, causeing the dollar to depreciate

Front 20

In the presence of purchasing power parity, if one dollar exchanges for 2 Swedish Kroner and if a VCR costs $400 in the United States then in Sweden the VCR should cost

Back 20

800 Kroner

Front 21

Consider the above table. If one were to buy pounds for immediate delivery on Tuesdaay the dollar cost of each pound would be

Back 21

1.4211

Front 22

Consider the above table.. Comparing tuesday to the previous Monday by Tuesday the dollar had

Back 22

appreciated against the pound

Front 23

When the price of foreign currency is above the equilibrium level

Back 23

an excess supply of that currency exists in the foreign exchange market

Front 24

For the UNited States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent. For Germany suppose the annual interest rate on government securities equals 5 percent and the inflation rate is 3. These variables would likely cause the dollar to _______ in the short run and ____ in the long run

Back 24

appreciate, depreciate

Front 25

To offset a depreciation of the dollar against the yen, the federal reserve would

Back 25

buy dollars on the foreign exchange market and raise domestic interest rates

Front 26

Which of the following is part of the US current account

Back 26

all of the above are part of the US current account

Front 27

If it takes .10 dollars to buy a MEcican Peso and .50 dollars buy a Brazillian real. Then it takes ____ peso to buy a Brazilian real

Back 27

5

Front 28

The Bretton Woods exchange rate system was an example of

Back 28

a modified gold standard

Front 29

When a currency board manages a nations currency it can be best defined an example of which of the following types of exchange rate systems

Back 29

a fully backed fixed rate system

Front 30

If the financial account of the US balance of payments is a net credit it means that the US

Back 30

has increased its total debt to the rest of the world

Front 31

Which of the following is most likely to lead to an increase in the current account deficit

Back 31

Increased investment spending

Front 32

The asian financial crises occurred int the

Back 32

1990s

Front 33

If government spending exceeds tax revenue and the current account balance is zero then

Back 33

Private domestic savings is greater than private domestic investment.