Question 1

An excess demand for dollars in exchange for yen will cause

Accepted Answer

An excess demand for dollars in exchange for yen means that there are more people who want to buy dollars with their yen than there are people who want to sell dollars for yen. This creates increased demand for the dollar and decreased demand for the yen, causing the dollar to appreciate relative to the yen.

Question 2

Why is the net primary income component in Australia's current account always negative?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Why is the net primary income component...

Question 3

Explain what the 'financial account' measures.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Explain what the 'financial account' measures.
_____________________________________________________________________________________________
_____________________________________________________________________________________________...

Question 4

Which of the following is not a source of demand for Japanese yen?

Accepted Answer

A Japanese firm wanting to purchase Australian beef would need to exchange yen for Australian dollars, thus creating a supply of yen rather than a demand for it.

Question 5

An excess demand of the dollar in exchange for yen will cause

Accepted Answer

An excess demand for the dollar in exchange for yen means that there is more demand for dollars than there is supply, which will drive up the price of dollars. This increase in the price of dollars relative to yen means that the dollar appreciates and the yen depreciates.

Question 6

Explain where,in Australia's balance of payments,an entry would be made for each of the following:
a.a financier from Singapore buys some Australian shares
b.an Australian buys some Italian shoes in Milan,Italy
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Explain where,in Australia's balance of payments,an entry...

Question 7

The following are hypothetical data for a country's balance of payments.You can assume the balance on the capital account is zero.Use the data to calculate the following:
a.the balance on the current account
b.the balance of trade on goods and services
c.the balance on the financial account
d.net errors and omissions
 $$\begin{array} { | l | r | } 
\hline { \text { Account } } & \text { Billions of Dollars } \
\hline \text { Exports of Goods } & 866 \
\hline \text { Imports of Goods } & - 1118 \
\hline \text { Exports of Services } & 335 \
\hline \text { Imports of Services } & - 266 \
\hline \text { Net primary income } & 76 \
\hline \text { Net secondary income } & - 59 \
\hline \text { Capital Inflows } & 1191 \
\hline \text { Capital Outflows } & - 1050 \
\hline
\end{array}$$ _____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of The following are hypothetical data for a...

Question 8

Suppose that the exchange rate between the Japanese yen and the Australia dollar is currently ¥60 = $1,then an individual could trade ________.

Accepted Answer

To find out how much ¥10 is worth in Australian dollars, divide ¥10 by the exchange rate of ¥60 per $1. This gives ¥10 / ¥60 = $0.1666, which rounds to $0.17.

Question 9

The exchange rate of the dollar in exchange for yen will rise if,ceteris paribus,

Accepted Answer

When income in Japan rises, there will be an increase in demand for imports, including imports from the United States. To purchase these imports, there will be an increased demand for dollars, causing the exchange rate of the dollar in exchange for yen to rise.

Question 10

The demand for yen in exchange for dollars will increase if,ceteris paribus,

Accepted Answer

If Japanese interest rates increase relative to interest rates in other countries, it will make holding yen more attractive for foreign investors and increase demand for yen in exchange for dollars.

Question 11

The dollar will appreciate relative to the yen if,ceteris paribus,

Accepted Answer

When speculators think the value of the dollar relative to the yen will rise, they will buy more dollars, increasing demand for dollars and pushing up the value of the dollar relative to the yen. The other options given would have the opposite effect on the dollar-yen exchange rate.

Question 12

Which of the following is a source of supply for the Australian dollar?

Accepted Answer

The answer of Which of the following is a source...

Question 13

The quantity supplied of dollars is likely to ________ when the exchange rate of yen per dollar ________.

Accepted Answer

When the exchange rate of yen per dollar rises, it means that each dollar can be exchanged for more yen, making holding dollars more valuable. Therefore, the quantity of dollars supplied in the foreign exchange market is likely to rise as holders of dollars are more willing to exchange them for yen at the higher rate.

Question 14

In international exchange markets,a rise in interest rates in Australia,ceteris paribus,will cause the demand for dollars to ________ and the supply of dollars to ________.

Accepted Answer

When interest rates rise in Australia, there will be an increase in demand for Australian dollars as investors will want higher returns for holding the currency. This, in turn, will lead to a decrease in the supply of Australian dollars circulating in the foreign exchange market. Therefore, the demand for US dollars will increase, while the supply of US dollars will decrease, causing the exchange rate to rise.

Question 15

The supply of dollars in exchange for yen will increase,if,ceteris paribus,

Accepted Answer

The answer of The supply of dollars in exchange for...

Question 16

The 'nominal exchange rate' is the

Accepted Answer

Nominal exchange rate refers to the value of one country's currency in terms of another country's currency.

Question 17

If currency traders expect the value of the dollar to rise,what effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

Accepted Answer

If currency traders expect the value of the dollar to rise, it means they believe the demand for dollars will increase in the future. This belief will cause them to increase their demand for dollars in the present, leading to an increase in the demand for dollars in the foreign exchange market. At the same time, the expectation of a stronger dollar will lead to a decrease in the supply of dollars as people hold onto their dollars in anticipation of higher value in the future. Therefore, the correct answer is A.

Question 18

If the _______________ for dollars __________,the market value of the dollar will ________ relative to other currencies around the world.

Accepted Answer

When the supply of dollars increases, it means there are more dollars available than before. According to the principles of supply and demand, an increase in supply, with demand remaining constant, leads to a decrease in the value of the currency. Therefore, if the supply of dollars increases, the market value of the dollar will depreciate relative to other currencies.

Question 19

What is the relationship across the current account,the capital account,the financial account,and the balance of payments?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is the relationship across the current...

Question 20

Speculators who anticipate that the future value of the dollar relative to the yen will ________,will cause a(n)______________.

Accepted Answer

If speculators anticipate that the future value of the dollar relative to the yen will increase, they are likely to buy more dollars now to profit from this expected increase, leading to an increase in the demand for dollars.

Quiz 20: Macroeconomics in an Open Economy

An excess demand for dollars in exchange for yen will cause

Why is the net primary income component in Australia's current account always negative? _ _

Explain what the 'financial account' measures. _ _

Which of the following is not a source of demand for Japanese yen?

An excess demand of the dollar in exchange for yen will cause

Explain where,in Australia's balance of payments,an entry would be made for each of the following: a.a financier from Singapore buys some Australian shares b.an Australian buys some Italian shoes in Milan,Italy _ _

Suppose that the exchange rate between the Japanese yen and the Australia dollar is currently ¥60 = $1,then an individual could trade ________.

The exchange rate of the dollar in exchange for yen will rise if,ceteris paribus,

The demand for yen in exchange for dollars will increase if,ceteris paribus,

The dollar will appreciate relative to the yen if,ceteris paribus,

Which of the following is a source of supply for the Australian dollar?

The quantity supplied of dollars is likely to when the exchange rate of yen per dollar .

In international exchange markets,a rise in interest rates in Australia,ceteris paribus,will cause the demand for dollars to and the supply of dollars to .

The supply of dollars in exchange for yen will increase,if,ceteris paribus,

The 'nominal exchange rate' is the

If currency traders expect the value of the dollar to rise,what effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

If the _____ for dollars ,the market value of the dollar will relative to other currencies around the world.

What is the relationship across the current account,the capital account,the financial account,and the balance of payments? _ _

Speculators who anticipate that the future value of the dollar relative to the yen will ,will cause a(n) ______.

Quiz 20: Macroeconomics in an Open Economy

An excess demand for dollars in exchange for yen will cause

Why is the net primary income component in Australia's current account always negative? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Explain what the 'financial account' measures. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Which of the following is not a source of demand for Japanese yen?

An excess demand of the dollar in exchange for yen will cause

Suppose that the exchange rate between the Japanese yen and the Australia dollar is currently ¥60 = $1,then an individual could trade ________.

The exchange rate of the dollar in exchange for yen will rise if,ceteris paribus,

The demand for yen in exchange for dollars will increase if,ceteris paribus,

The dollar will appreciate relative to the yen if,ceteris paribus,

Which of the following is a source of supply for the Australian dollar?

The quantity supplied of dollars is likely to ________ when the exchange rate of yen per dollar ________.

In international exchange markets,a rise in interest rates in Australia,ceteris paribus,will cause the demand for dollars to ________ and the supply of dollars to ________.

The supply of dollars in exchange for yen will increase,if,ceteris paribus,

The 'nominal exchange rate' is the

If currency traders expect the value of the dollar to rise,what effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

If the _______________ for dollars __________,the market value of the dollar will ________ relative to other currencies around the world.

Speculators who anticipate that the future value of the dollar relative to the yen will ________,will cause a(n) ______________.

Why is the net primary income component in Australia's current account always negative? _ _

Explain what the 'financial account' measures. _ _

The quantity supplied of dollars is likely to when the exchange rate of yen per dollar .

In international exchange markets,a rise in interest rates in Australia,ceteris paribus,will cause the demand for dollars to and the supply of dollars to .

If the _____ for dollars ,the market value of the dollar will relative to other currencies around the world.

Speculators who anticipate that the future value of the dollar relative to the yen will ,will cause a(n) ______.