Question 1

The exchange rate is the___________ price at which the of one country exchanges for the ___________of another country.

Accepted Answer

The exchange rate is the price at which one country's currency exchanges for the currency of another country. Therefore, the correct answer is A, where the first blank is filled with "currency" and the second blank is also filled with "currency."

Question 2

If the dollarʹs value changes from 120 yen per dollar to 110 yen per dollar, the dollar has

Accepted Answer

When the value of the dollar decreases in terms of the yen, it means that it takes more dollars to buy the same amount of yen. This indicates a decrease in the purchasing power of the dollar in relation to the yen, which is referred to as a depreciation of the dollar.

Question 3

The term ʺforeign currencyʺ refers to foreign
I. coins
II. notes
III. bank deposits

Accepted Answer

Foreign currency includes coins, notes, and bank deposits that are denominated in a currency other than the domestic currency.

Question 4

Which of the following examples definitely illustrates a depreciation of the U.S. dollar?

Accepted Answer

In option A, the dollar exchanges for a lower amount of euros compared to the initial exchange, indicating a depreciation of the dollar. Options B, C, and D show an appreciation of the dollar as it gains more yen, euros, and pounds respectively.

Question 5

The exchange rate is the

Accepted Answer

The exchange rate is the price of one country's currency in terms of another country's currency. It determines how much of one currency can be exchanged for another currency.

Question 6

When the U.S. dollar depreciates against the yen, the yen becomes___________ expensive and the
u.S. exchange rate___________ .

Accepted Answer

When the U.S. dollar depreciates against the yen, it means that it can buy fewer yen. This makes the yen more expensive. As a result, the value of the U.S. exchange rate falls.

Question 7

By definition, currency depreciation occurs when the value of

Accepted Answer

Currency depreciation occurs when one currency falls in value relative to another currency.

Question 8

When Safeway supermarkets in the United States buys strawberries from Mexico,

Accepted Answer

The answer of When Safeway supermarkets in the United States...

Question 9

Last year the exchange rate between U.S. dollars and Mexican pesos was 10 pesos per dollar. Today is it 11 pesos per dollar. Here, the dollar _________against the peso,_________ and the peso against the dollar

Accepted Answer

The correct answer is D because the dollar appreciated against the peso (it is now worth more in pesos than it was before), while the peso depreciated against the dollar (it is now worth less in dollars than it was before).

Question 10

Suppose that the exchange rate between the dollar and the peso changed from 6 pesos per dollar to 8 pesos per dollar. This change means that the

Accepted Answer

The peso depreciated because it now takes more pesos to buy one dollar, indicating a loss in value relative to the dollar.

Question 11

Which of the following examples definitely illustrates an appreciation of the U.S. dollar?

Accepted Answer

In option B, the dollar is able to exchange for more pounds, indicating that the pound is weaker and the dollar is stronger. This illustrates an appreciation of the U.S. dollar. In options A and C, the exchange rates do not provide definitive information about the relative strength of the dollar since they involve multiple currencies. Option D indicates that none of the options illustrate an appreciation of the U.S. dollar.

Question 12

If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with

Accepted Answer

The Chinese manufacturer is paid in yuan, the Chinese currency, when portable disk players made in China are imported into the United States.

Question 13

When the U.S. dollar depreciates against the yen, the yen _________and the exchange rate _________

Accepted Answer

When the U.S. dollar depreciates against the yen, the yen appreciates, and the exchange rate (expressed as yen per dollar) falls.

Question 14

If the United States sells beef to Japan, the U.S. beef producer is paid with

Accepted Answer

The answer of If the United States sells beef to...

Question 15

A decrease in the value of a currency in terms of other currencies is known as

Accepted Answer

A decrease in the value of a currency in terms of other currencies is known as depreciation. It means that the currency has lost its value or purchasing power in comparison to other currencies.

Question 16

Americans demand Japanese yen in order to

Accepted Answer

Americans demand Japanese yen in order to buy Japanese products. When Americans buy Japanese products, they need to pay in Japanese yen. Therefore, they demand Japanese yen in order to make these purchases.

Question 17

An increase in the value of a domestic currency in terms of other currencies is known as

Accepted Answer

An increase in the value of a domestic currency in terms of other currencies is known as an appreciation.

Question 18

When the value of one currency falls relative to another currency, the exchange rate for the first currency has

Accepted Answer

When the value of one currency falls relative to another currency, it is known as depreciation. This means that the exchange rate for the depreciated currency has gone down. Therefore, the best choice is B.

Question 19

Suppose the exchange rate of the U.S. dollar was 1.50 British pounds = $1.00 U.S.) on Wednesday, and on Monday the exchange rate was $.75 U.S.) = 1.00 British pound. Which of the following best describes what happened between Wednesday and Monday?

Accepted Answer

On Wednesday, 1.50 British pounds were equal to $1.00 U.S., while on Monday, 1.00 British pound was worth $.75 U.S. This means that the U.S. dollar became weaker (depreciated) against the British pound, which means that the British pound appreciated against the U.S. dollar. Therefore, both answers B and C are correct.

Question 20

Which of the following statements is correct?
I. The exchange rate is a price.
II. The exchange rate is different from other prices because it is NOT determined by supply and demand.

Accepted Answer

The exchange rate is a price that represents the ratio at which one currency can be exchanged for another. It is determined by the forces of supply and demand in the foreign exchange market, just like other prices. Therefore, statement II is incorrect.

Quiz 9: The Exchange Rate and the Balance of Payments

The exchange rate is the_ price at which the of one country exchanges for the _of another country.

If the dollarʹs value changes from 120 yen per dollar to 110 yen per dollar, the dollar has

The term ʺforeign currencyʺ refers to foreign I. coins II. notes III. bank deposits

Which of the following examples definitely illustrates a depreciation of the U.S. dollar?

The exchange rate is the

When the U.S. dollar depreciates against the yen, the yen becomes_ expensive and the u.S. exchange rate_ .

By definition, currency depreciation occurs when the value of

When Safeway supermarkets in the United States buys strawberries from Mexico,

Last year the exchange rate between U.S. dollars and Mexican pesos was 10 pesos per dollar. Today is it 11 pesos per dollar. Here, the dollar _against the peso,_ and the peso against the dollar

Suppose that the exchange rate between the dollar and the peso changed from 6 pesos per dollar to 8 pesos per dollar. This change means that the

Which of the following examples definitely illustrates an appreciation of the U.S. dollar?

If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with

When the U.S. dollar depreciates against the yen, the yen _and the exchange rate _

If the United States sells beef to Japan, the U.S. beef producer is paid with

A decrease in the value of a currency in terms of other currencies is known as

Americans demand Japanese yen in order to

An increase in the value of a domestic currency in terms of other currencies is known as

When the value of one currency falls relative to another currency, the exchange rate for the first currency has

Suppose the exchange rate of the U.S. dollar was 1.50 British pounds = $1.00 U.S.) on Wednesday, and on Monday the exchange rate was $.75 U.S.) = 1.00 British pound. Which of the following best describes what happened between Wednesday and Monday?

Which of the following statements is correct? I. The exchange rate is a price. II. The exchange rate is different from other prices because it is NOT determined by supply and demand.

Quiz 9: The Exchange Rate and the Balance of Payments

The exchange rate is the___________ price at which the of one country exchanges for the ___________of another country.

If the dollarʹs value changes from 120 yen per dollar to 110 yen per dollar, the dollar has

The term ʺforeign currencyʺ refers to foreign I. coins II. notes III. bank deposits

Which of the following examples definitely illustrates a depreciation of the U.S. dollar?

The exchange rate is the

When the U.S. dollar depreciates against the yen, the yen becomes___________ expensive and the u.S. exchange rate___________ .

By definition, currency depreciation occurs when the value of

When Safeway supermarkets in the United States buys strawberries from Mexico,

Last year the exchange rate between U.S. dollars and Mexican pesos was 10 pesos per dollar. Today is it 11 pesos per dollar. Here, the dollar _________against the peso,_________ and the peso against the dollar

Suppose that the exchange rate between the dollar and the peso changed from 6 pesos per dollar to 8 pesos per dollar. This change means that the

Which of the following examples definitely illustrates an appreciation of the U.S. dollar?

If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with

When the U.S. dollar depreciates against the yen, the yen _________and the exchange rate _________

If the United States sells beef to Japan, the U.S. beef producer is paid with

A decrease in the value of a currency in terms of other currencies is known as

Americans demand Japanese yen in order to

An increase in the value of a domestic currency in terms of other currencies is known as

When the value of one currency falls relative to another currency, the exchange rate for the first currency has

Suppose the exchange rate of the U.S. dollar was 1.50 British pounds = $1.00 U.S.) on Wednesday, and on Monday the exchange rate was $.75 U.S.) = 1.00 British pound. Which of the following best describes what happened between Wednesday and Monday?

Which of the following statements is correct? I. The exchange rate is a price. II. The exchange rate is different from other prices because it is NOT determined by supply and demand.

The exchange rate is the_ price at which the of one country exchanges for the _of another country.

When the U.S. dollar depreciates against the yen, the yen becomes_ expensive and the u.S. exchange rate_ .

Last year the exchange rate between U.S. dollars and Mexican pesos was 10 pesos per dollar. Today is it 11 pesos per dollar. Here, the dollar _against the peso,_ and the peso against the dollar

When the U.S. dollar depreciates against the yen, the yen _and the exchange rate _