Question 1

The lower the exchange rate, the

Accepted Answer

A lower exchange rate makes Canadian dollars cheaper for foreigners, increasing the demand for Canadian dollars (B). Simultaneously, Canadians find foreign currencies more expensive, reducing the supply of Canadian dollars to the market (C).

Question 2

If the exchange rate is 80 U.S.cents per Canadian dollar, then

Accepted Answer

To find how many Canadian dollars one U.S. dollar can buy, divide 1 by 0.80, which equals 1.25.

Question 3

The law of demand for foreign exchange states that other things remaining the same,

Accepted Answer

According to the law of demand for foreign exchange, as the exchange rate (price of foreign currency) increases, the quantity of Canadian dollars demanded decreases. This inverse relationship is due to the fact that as the exchange rate becomes more expensive, Canadian goods and services become relatively more expensive for foreigners, leading them to demand less Canadian dollars to purchase those goods and services.

Question 4

Foreign currency is

Accepted Answer

Foreign currency encompasses all forms of money from another country that are used in international transactions, including notes (bills), coins, and bank deposits. These are the forms of currency that can be exchanged or used in the financial systems outside their country of origin. Credit cards are not considered a form of currency, but rather a payment method, and the monetary base specifically refers to the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held in the central bank's reserves, which is a more specific concept than foreign currency in general.

Question 5

Refer to the table below to answer the following questions.
Table 9.1.1
 
-Refer to Table 9.1.1.Between 2016 and 2017, the dollar _______ versus the euro and _______ versus the yen.

Accepted Answer

From the table, we see that the value of the dollar increased from 0.90 euros per dollar in 2016 to 0.95 euros per dollar in 2017, meaning that the dollar appreciated against the euro. On the other hand, the value of the dollar decreased from 107 yen per dollar in 2016 to 112 yen per dollar in 2017, meaning that the dollar depreciated against the yen. Therefore, the answer is B) appreciated; depreciated.

Question 6

Currency depreciation is a reduction in the

Accepted Answer

Currency depreciation is a reduction in the value of a currency in relation to other currencies on the foreign exchange market, which means that each unit of domestic currency can only buy a smaller amount of foreign currency than before. This can make imports more expensive and reduce the purchasing power of domestic consumers and businesses.

Question 7

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 9 South African rand.How many U.S.dollars will one rand buy?

Accepted Answer

The answer of Suppose that the following situation exists in...

Question 8

Suppose that the Canadian dollar exchanges for 0.80 U.S.dollars and also for 0.60 euros.A U.S.dollar exchanges for

Accepted Answer

To find the exchange rate between U.S. dollars and euros, we can use the exchange rates given for Canadian dollars. We know that 1 Canadian dollar = 0.80 U.S. dollars and 1 Canadian dollar = 0.60 euros. Therefore, 1 U.S. dollar = (1/0.80) Canadian dollars = 1.25 Canadian dollars and 1 euro = (1/0.60) Canadian dollars = 1.67 Canadian dollars. To find the exchange rate between U.S. dollars and euros, we divide the exchange rate of euros by the exchange rate of U.S. dollars: 1.67 euros / 1.25 U.S. dollars = 1.336 euro/U.S. dollar or approximately 0.75 euros/U.S. dollar. Therefore, the best choice is B.

Question 9

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 5.0 Chinese yuan.How many yuan will $1 U.S.buy?

Accepted Answer

Since 1 Canadian dollar buys $0.80 U.S., $1 U.S. will buy 1 / 0.80 = 1.25 Canadian dollars. Given that 1 Canadian dollar buys 5.0 Chinese yuan, 1.25 Canadian dollars will buy 1.25 * 5 = 6.25 Chinese yuan.

Question 10

The exchange rate is the

Accepted Answer

The exchange rate refers to the price at which one currency can be exchanged for another currency. It is essentially the value of one currency compared to another.

Question 11

If the exchange rate is above the equilibrium exchange rate in the foreign exchange market,

Accepted Answer

If the exchange rate is above the equilibrium exchange rate, it means that the domestic currency is overvalued and foreign currencies are undervalued. This leads to a surplus of domestic currency and a shortage of foreign currency in the foreign exchange market. As a result, the excess supply of domestic currency will push its price down, causing the exchange rate to fall until it reaches the equilibrium level. Therefore, choice C is the correct answer.

Question 12

The law of supply of foreign exchange states that other things remaining the same,

Accepted Answer

The law of supply in foreign exchange markets indicates that, with other factors constant, a higher exchange rate increases the quantity of currency supplied because sellers are incentivized by higher returns for their currency.

Question 13

If the Canadian dollar depreciates, it means that

Accepted Answer

A depreciation in the Canadian dollar means that it has weakened in value compared to foreign currencies. This means that one Canadian dollar can now buy less of a foreign currency.

Question 14

The market in which the currency of one country is exchanged for the currency of another country is the

Accepted Answer

The foreign exchange market is specifically for the exchange of one country's currency for another country's currency. The other markets listed have different purposes and functions.

Question 15

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys 7.2 Chinese yuan and 1 Canadian dollar buys 5.77 South African rand.How many yuan will one rand buy?

Accepted Answer

First, we need to find out the exchange rate between yuan and rand. We can do this by using cross-multiplication.

1 Canadian dollar = 7.2 Chinese yuan 
1 Canadian dollar = 5.77 South African rand

To find out how many yuan one rand will buy, we can set up the following proportion:

7.2 yuan : 1 CAD = x yuan : 5.77 rand

Cross-multiplying:

7.2 x 5.77 = 1 x

41.544 = x

Therefore, 1 rand will buy 41.544 yuan.

Alternatively, we can use inverse ratios:

1 Canadian dollar buys 7.2 yuan

Therefore, 1 yuan buys 1/7.2 Canadian dollars

1 Canadian dollar buys 5.77 rand

Therefore, 1 rand buys 1/5.77 Canadian dollars

To find out how many yuan one rand will buy:

1 rand = (1/5.77) Canadian dollars

1 yuan = (1/7.2) Canadian dollars

Thus, 1 rand will buy (1/5.77)/(1/7.2) = 1.25 yuan.

Question 16

The higher the exchange rate, all other things remaining the same, the

Accepted Answer

A higher exchange rate means that the domestic currency has appreciated, making foreign goods cheaper for domestic consumers, thus increasing the volume of imports.

Question 17

Which of the following factors influence the demand for Canadian dollars?

Accepted Answer

Interest rates in Canada and other countries affect the demand for Canadian dollars because higher interest rates attract foreign investors who want to earn a higher return on their investments in Canadian assets, leading to an increase in demand for Canadian dollars. The expected future exchange rate also affects demand because if investors believe the Canadian dollar will appreciate in the future, they will want to buy Canadian dollars now to profit from the expected appreciation. The exchange rate and world demand for Canadian exports also affect the demand for Canadian dollars because if foreign buyers want to purchase Canadian goods, they must first exchange their currency for Canadian dollars, leading to an increase in demand for Canadian dollars. Therefore, both A and B are correct. The world demand for Canadian exports and Canadian demand for imports, as noted in option C, can also affect the demand for Canadian dollars, but this factor is less directly related to currency demand. Option E is incorrect because it only includes factors related to either exports or imports, but not interest rates or expected exchange rates.

Question 18

Refer to the table below to answer the following questions.
Table 9.1.1
 
-Refer to Table 9.1.1.Between 2016 and 2017, the yen

Accepted Answer

The answer of Refer to the table below to answer...

Question 19

Suppose the dollar- yen foreign exchange rate changes from 140 yen per dollar to 130 yen per dollar.Then the yen has

Accepted Answer

When the dollar-yen exchange rate decreases from 140 to 130, it means that now we need fewer yen to buy one dollar. Therefore, the yen has appreciated against the dollar. At the same time, it also means that now we need more dollars to buy one yen. Thus, the dollar has depreciated against the yen.

Question 20

Appreciation of a currency means

Accepted Answer

Appreciation of a currency means that a country's currency can buy more foreign currency. This means that the exchange rate of the currency has increased so that it can be exchanged for more units of another currency. This can be beneficial for consumers in the country who want to buy imports or travel abroad, as they can exchange their currency for more foreign currency and therefore get more goods or services for the same amount of money. However, it can be detrimental for exporters in the country, as their goods become more expensive for foreign buyers to purchase.

Quiz 9: The Exchange Rate and the Balance of Payments

The lower the exchange rate, the

If the exchange rate is 80 U.S.cents per Canadian dollar, then

The law of demand for foreign exchange states that other things remaining the same,

Foreign currency is

Refer to the table below to answer the following questions. Table 9.1.1 -Refer to Table 9.1.1.Between 2016 and 2017, the dollar _ versus the euro and _ versus the yen.

Currency depreciation is a reduction in the

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 9 South African rand.How many U.S.dollars will one rand buy?

Suppose that the Canadian dollar exchanges for 0.80 U.S.dollars and also for 0.60 euros.A U.S.dollar exchanges for

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 5.0 Chinese yuan.How many yuan will $1 U.S.buy?

The exchange rate is the

If the exchange rate is above the equilibrium exchange rate in the foreign exchange market,

The law of supply of foreign exchange states that other things remaining the same,

If the Canadian dollar depreciates, it means that

The market in which the currency of one country is exchanged for the currency of another country is the

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys 7.2 Chinese yuan and 1 Canadian dollar buys 5.77 South African rand.How many yuan will one rand buy?

The higher the exchange rate, all other things remaining the same, the

Which of the following factors influence the demand for Canadian dollars?

Refer to the table below to answer the following questions. Table 9.1.1 -Refer to Table 9.1.1.Between 2016 and 2017, the yen

Suppose the dollar- yen foreign exchange rate changes from 140 yen per dollar to 130 yen per dollar.Then the yen has

Appreciation of a currency means

Quiz 9: The Exchange Rate and the Balance of Payments

The lower the exchange rate, the

If the exchange rate is 80 U.S.cents per Canadian dollar, then

The law of demand for foreign exchange states that other things remaining the same,

Foreign currency is

Refer to the table below to answer the following questions. Table 9.1.1 -Refer to Table 9.1.1.Between 2016 and 2017, the dollar _______ versus the euro and _______ versus the yen.

Currency depreciation is a reduction in the

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 9 South African rand.How many U.S.dollars will one rand buy?

Suppose that the Canadian dollar exchanges for 0.80 U.S.dollars and also for 0.60 euros.A U.S.dollar exchanges for

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys $0.80 U.S, and 1 Canadian dollar buys 5.0 Chinese yuan.How many yuan will $1 U.S.buy?

The exchange rate is the

If the exchange rate is above the equilibrium exchange rate in the foreign exchange market,

The law of supply of foreign exchange states that other things remaining the same,

If the Canadian dollar depreciates, it means that

The market in which the currency of one country is exchanged for the currency of another country is the

Suppose that the following situation exists in the foreign exchange market: 1 Canadian dollar buys 7.2 Chinese yuan and 1 Canadian dollar buys 5.77 South African rand.How many yuan will one rand buy?

The higher the exchange rate, all other things remaining the same, the

Which of the following factors influence the demand for Canadian dollars?

Refer to the table below to answer the following questions. Table 9.1.1 -Refer to Table 9.1.1.Between 2016 and 2017, the yen

Suppose the dollar- yen foreign exchange rate changes from 140 yen per dollar to 130 yen per dollar.Then the yen has

Appreciation of a currency means

Refer to the table below to answer the following questions. Table 9.1.1 -Refer to Table 9.1.1.Between 2016 and 2017, the dollar _ versus the euro and _ versus the yen.