Question 1

What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 Pounds in London?

Accepted Answer

To find the exchange rate, we need to see how much one dollar is worth in pounds. We can start by using the price of jeans in both cities. If 50 dollars are worth 100 pounds, then 1 dollar is worth 2 pounds (100 pounds divided by 50 dollars). Therefore, the exchange rate is 0.5 dollars per British pound.

Question 2

The Japanese currency is called the

Accepted Answer

The Japanese currency is called the Yen.

Question 3

Compute how many dollars it would cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds for the following exchange rates.

Accepted Answer

The answer of Compute how many dollars it would cost...

Question 4

Which one of the following statements is the MOST accurate?

Accepted Answer

When a country's currency depreciates, its goods become relatively cheaper for foreigners because they can buy more of the country's goods with the same amount of their own currency. This can lead to an increase in exports, as foreign buyers are attracted by the lower prices.

Question 5

How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.60 dollars per British pound?

Accepted Answer

To convert $45 into pounds, we can multiply it by the exchange rate:
45 * 1.60 = 72
Therefore, the jeans cost 72 pounds.

Question 6

Based on the case study, "Exchange Rates, Auto Prices, and Currency Wars," explain why exchange rates are of critical importance to firms in the automobile industry, and how Japan has benefited from changes in the value of the Yen.

Accepted Answer

The answer of Based on the case study, "Exchange Rates,...

Question 7

How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 2.00 dollars per British pound?

Accepted Answer

To convert $45 to British pounds at an exchange rate of 2.00 dollars per British pound, you divide 45 by 2, which equals 22.5 British pounds.

Question 8

How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.80 dollars per British pound?

Accepted Answer

The answer of How many British pounds would it cost...

Question 9

A(n) ________ of a nation's currency will cause imports to ________ and exports to ________, all other things held constant.

Accepted Answer

A depreciation of a nation's currency makes its goods cheaper for foreign buyers, increasing exports, while making foreign goods more expensive for domestic consumers, decreasing imports.

Question 10

In the year 2012, Shinzo Abe became prime minister of Japan, promising bold policies to improve Japan's economy. What was the focus of his policies and how did they affect Japan's trade position?

Accepted Answer

The answer of In the year 2012, Shinzo Abe became...

Question 11

If the goods' money prices do NOT change, a depreciation of the dollar against the pound

Accepted Answer

A depreciation of the dollar means it takes more dollars to buy the same amount of pounds. If the money prices of goods do not change, British sweaters become more expensive in terms of American jeans because more dollars are needed to buy the same amount of pounds to purchase the sweaters.

Question 12

What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 60 dollars in New York and 30 Pounds in London?

Accepted Answer

The exchange rate can be calculated by dividing the cost in dollars by the cost in pounds: 60 dollars / 30 pounds = 2 dollars per British pound.

Question 13

How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.80 dollars per one British pound?

Accepted Answer

To convert British pounds to dollars, we need to multiply the amount by the exchange rate. Therefore, 50 British pounds x 1.80 dollars per one British pound = 90 dollars. So it would cost 90 dollars to buy the sweater.

Question 14

If the goods' money prices do NOT change, an appreciation of the dollar against the pound

Accepted Answer

An appreciation of the dollar means that it can buy more pounds than before. If the prices of goods do not change, this means that the British sweater still costs the same amount in pounds. However, since each dollar can buy more pounds, the sweater becomes cheaper in terms of dollars. Therefore, British sweaters are cheaper in terms of American jeans.

Question 15

How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.50 dollars per British pound?

Accepted Answer

We can convert the $45 price tag into pounds using the exchange rate:

$45 / 1.5 = £30

Therefore, it would cost 30 British pounds to buy the American designer jeans. Choice C is the correct answer.

Question 16

An appreciation of a country's currency

Accepted Answer

When a country's currency appreciates, it means that it has increased in value relative to other currencies. This increase in value would result in a higher relative price of its exports, as they become relatively more expensive to foreign buyers. At the same time, it would lower the relative price of its imports, as they become relatively cheaper for domestic buyers. This would lead to an increase in demand for domestic goods and a decrease in demand for foreign goods, which would contribute to a reduction in the trade deficit. Therefore, the best choice is D.

Question 17

When a country's currency depreciates

Accepted Answer

When a country's currency depreciates, its goods become cheaper for foreigners, boosting exports. Conversely, foreign goods become more expensive for domestic residents, making imports costlier.

Question 18

How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.25 dollars per one British pound?

Accepted Answer

To convert 50 British pounds to dollars, we multiply by the exchange rate of 1.25 dollars per pound
50 * 1.25 = 62.5
Therefore, it would cost 62.5 dollars to buy the Edinburgh Woolen Mill sweater.

Question 19

How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.50 dollars per one British pound?

Accepted Answer

To convert the cost from British pounds to dollars, multiply the cost in pounds by the exchange rate: 50 pounds * 1.50 dollars/pound = 75 dollars.

Question 20

Compute how many British pounds it would cost to buy a pair of American designer jeans costing $45.

Accepted Answer

The answer of Compute how many British pounds it would...

Quiz 14: Exchange Rates and the Foreign Exchange Market: an Asset Approach