Question 1

Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?

Accepted Answer

When $0.10 equals 1 peso, the peso is stronger relative to the dollar compared to the other options, meaning the Mexican buyer would get more for their money when purchasing American goods.

Question 2

The higher the U.S.dollar price per Mexican peso,the __________ Mexican goods are for Americans and the __________ Mexican goods Americans will buy; thus __________ pesos will be demanded.

Accepted Answer

When the U.S. dollar price per Mexican peso is higher, it means it costs more dollars to buy pesos, making Mexican goods more expensive for Americans. Consequently, Americans will buy fewer Mexican goods, and therefore, fewer pesos will be demanded to make such purchases.

Question 3

The Mexican demand for American goods leads to

Accepted Answer

When Mexican consumers or businesses demand American goods, they need U.S. dollars to pay for these goods. This increases the demand for U.S. dollars while simultaneously increasing the supply of Mexican pesos on the foreign exchange market, as they exchange pesos for dollars.

Question 4

An American computer is priced at $1,500.If the exchange rate between the U.S.dollar and the Japanese yen is $0.01 per yen,the equivalent price of the computer in yen is approximately __________ yen.

Accepted Answer

The answer of An American computer is priced at $1,500.If...

Question 5

When exports of American goods increase,this __________ the demand for U.S.dollars and at the same time __________ foreign currencies.

Accepted Answer

The answer of When exports of American goods increase,this __________...

Question 6

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

Accepted Answer

In a foreign exchange market diagram where the exchange rate is expressed as dollars per peso, the quantity axis (horizontal) represents the amount of pesos being traded. The U.S. demand for Mexican goods would increase the demand for pesos to pay for these goods, thus affecting the demand curve.

Question 7

The more dollars that must be given up to buy one British pound,the __________ American goods are for the British and the __________ American goods the British will buy; thus __________ dollars will be demanded.

Accepted Answer

The answer of The more dollars that must be given...

Question 8

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?

Accepted Answer

The lower the dollar amount needed to purchase a peso, the more pesos an American buyer can get for their dollars, making Mexican goods cheaper for them. Therefore, an exchange rate of $0.04 = 1 peso (D) is most preferable for an American buyer of Mexican goods.

Question 9

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be __________ and the price of the raincoat in dollars will be __________.

Accepted Answer

To find the price of the television in pesos, we need to multiply $500 by the exchange rate ($0.10 = 1 peso):
$500 * (1/0.10) = 5000 pesos
To find the price of the raincoat in dollars, we need to divide 700 pesos by the exchange rate ($0.10 = 1 peso):
700 pesos * (1/0.10) = $70
Therefore, the best choice is A, as it correctly gives the price of the television in pesos and the price of the raincoat in dollars.

Question 10

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________,and the dollar will __________.

Accepted Answer

If the equilibrium exchange rate between U.S. dollars and Japanese yen is $0.008 = 1 yen, but the current exchange rate is $0.007 = 1 yen, it means that the U.S. dollar is undervalued relative to the Japanese yen. Thus, the dollar price of a yen should increase, which means the dollar should appreciate. Therefore, the correct answer is C: increase; depreciate.

Question 11

The U.S.dollar has depreciated relative to the Japanese yen if it takes

Accepted Answer

The answer of The U.S.dollar has depreciated relative to the...

Question 12

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11. If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have __________ and the dollar to have __________.

Accepted Answer

When the U.S. dollar price per Mexican peso changes from $0.11 to $0.10, it means that the Mexican peso can now buy more U.S. dollars. Therefore, the peso has appreciated and the U.S. dollar has depreciated.

Question 13

If the average income per U.S.worker decreases while that of Japanese workers remains unchanged,then the demand curve for Japanese yen will shift __________,which will cause the equilibrium exchange rate of the dollar price per yen to __________,which is the same thing as saying that the dollar will __________.

Accepted Answer

The answer of If the average income per U.S.worker decreases...

Question 14

The foreign exchange market is the market in which

Accepted Answer

The foreign exchange market is the market where currencies of different countries are bought and sold.

Question 15

Suppose that an American-made pair of blue jeans has a price of $80.If the exchange rate is $0.095 = 1 peso,then a Mexican consumer would have to pay approximately __________ pesos to purchase the blue jeans,but if the exchange rate is $0.085 = 1 peso,then a Mexican consumer would have to pay _________ pesos to purchase the blue jeans.

Accepted Answer

The answer of Suppose that an American-made pair of blue...

Question 16

An American computer is priced at $1,500.If the exchange rate between the U.S.dollar and the Mexican peso is $0.089 = 1 peso,approximately how many pesos would a Mexican buyer pay for the computer?

Accepted Answer

1500/0.089 = 16,853.93 pesos

Question 17

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

Accepted Answer

The answer of In a foreign exchange market diagram with...

Question 18

Americans buying Japanese cars

Accepted Answer

Americans are supplying U.S. dollars to purchase Japanese cars, and are in turn demanding Japanese yen to complete the transaction. Therefore, they supply U.S. dollars and demand Japanese yen.

Question 19

The lower the U.S.dollar price per Mexican peso,the __________ Mexican goods are for Americans and the __________ Mexican goods Americans will buy; thus __________ pesos will be demanded.

Accepted Answer

When the U.S. dollar price per Mexican peso decreases, Mexican goods become less expensive for Americans, leading to an increase in the quantity of Mexican goods Americans will buy, thus increasing the demand for pesos.

Question 20

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen but currently the exchange rate is $0.0089 = 1 yen,then a __________ exists.

Accepted Answer

When the current exchange rate is lower than the equilibrium rate ($0.0089 < $0.01), it means that yen is cheaper than it should be, indicating a surplus of dollars (people have more dollars they want to exchange for yen) and a shortage of yen (there's not enough yen available at this price for all the dollars people want to exchange).

Quiz 35: International Finance

Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?

The higher the U.S.dollar price per Mexican peso,the Mexican goods are for Americans and the Mexican goods Americans will buy; thus __ pesos will be demanded.

The Mexican demand for American goods leads to

An American computer is priced at $1,500.If the exchange rate between the U.S.dollar and the Japanese yen is $0.01 per yen,the equivalent price of the computer in yen is approximately __________ yen.

When exports of American goods increase,this the demand for U.S.dollars and at the same time foreign currencies.

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

The more dollars that must be given up to buy one British pound,the American goods are for the British and the American goods the British will buy; thus __ dollars will be demanded.

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be and the price of the raincoat in dollars will be .

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will ,and the dollar will .

The U.S.dollar has depreciated relative to the Japanese yen if it takes

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11. If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have and the dollar to have .

If the average income per U.S.worker decreases while that of Japanese workers remains unchanged,then the demand curve for Japanese yen will shift ,which will cause the equilibrium exchange rate of the dollar price per yen to ,which is the same thing as saying that the dollar will __.

The foreign exchange market is the market in which

An American computer is priced at $1,500.If the exchange rate between the U.S.dollar and the Mexican peso is $0.089 = 1 peso,approximately how many pesos would a Mexican buyer pay for the computer?

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

Americans buying Japanese cars

The lower the U.S.dollar price per Mexican peso,the Mexican goods are for Americans and the Mexican goods Americans will buy; thus __ pesos will be demanded.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen but currently the exchange rate is $0.0089 = 1 yen,then a __________ exists.