Question 1

Other things constant, if Americans suddenly increased their desire to vacation in Mexico, the dollar price of the Mexican peso would

Accepted Answer

An increase in demand for Mexican vacations from Americans would lead to an increase in demand for Mexican pesos. This increase in demand would cause the value of the Mexican peso to appreciate, or increase in value, relative to the US dollar. Therefore, the correct answer is A) increase, which is an appreciation of the Mexican peso.

Question 2

Other things constant, if Americans suddenly decreased their desire for Mexican tequila, the exchange rate value of the Mexican peso would

Accepted Answer

If Americans decrease their desire for Mexican tequila, this would decrease the demand for the Mexican peso, causing its value to decrease. A decrease in value is known as depreciation. Therefore, the Mexican peso would depreciate in value.

Question 3

If a U.S. dollar exchanges for 0.6 English pounds, the dollar price of a pound is

Accepted Answer

The answer of If a U.S. dollar exchanges for 0.6...

Question 4

If the exchange rate between the U.S. dollar and the Russian ruble was 0.04 ($0.04 = one ruble), what would be the price in dollars of a bottle of Russian wine selling for 2,000 ruble?

Accepted Answer

To convert rubles to U.S. dollars, we need to multiply the price in rubles by the exchange rate:
$0.04/ruble x 2,000 ruble = $80. Therefore, the price of the bottle of wine in dollars is $80.

Question 5

A pair of Nike tennis shoes costs $90 in the United States. If the exchange rate between the United States and Mexico is 0.10 ($0.10 = 1 peso), then that same pair of shoes would cost ____ pesos.

Accepted Answer

Since 1 USD = 0.10 pesos, we can convert $90 into pesos by multiplying 90 by 10 (since there are 10 pesos for every 1 USD). 
90 USD * 10 pesos/USD = 900 pesos
Therefore, the same pair of Nike tennis shoes would cost 900 pesos in Mexico.

Question 6

An appreciation of a nation's currency means that

Accepted Answer

The answer of An appreciation of a nation's currency means...

Question 7

If the exchange rate between the U.S. dollar and the English pound went from $1.46 US = 1 pound to $1.60 US = 1 pound, then

Accepted Answer

The increase in the exchange rate means that the value of the pound has strengthened relative to the dollar. This makes English goods more expensive for American consumers because they now have to pay more dollars for the same amount of pounds. Conversely, American goods become cheaper for English citizens because they can now exchange fewer pounds for the same amount of dollars. The change in exchange rates does not necessarily indicate anything about American exports to England, so option D cannot be selected.

Question 8

An appreciation in the U.S. dollar benefits which of the following groups of people?

Accepted Answer

The answer of An appreciation in the U.S. dollar benefits...

Question 9

Suppose U.S.-produced wheat costs $5 per bushel and the exchange rate is 100 yen = $1. If the exchange rate changes to 90 yen = $1, the

Accepted Answer

The answer of Suppose U.S.-produced wheat costs $5 per bushel...

Question 10

If the exchange rate between the U.S. dollar and the European euro went from $1.20 US = 1 euro to $1.10 US = 1 euro, then

Accepted Answer

The answer of If the exchange rate between the U.S....

Question 11

An appreciation of one's currency means that

Accepted Answer

The answer of An appreciation of one's currency means that
...

Question 12

If the exchange rate between the U.S. dollar and the Japanese yen was 1 U.S. dollar equals 125 yen, what would be the price in dollars of Japanese automobiles selling for 2,500,000 yen?

Accepted Answer

To find out the price of the automobile in dollars, we need to divide the yen price by the exchange rate. So:

2,500,000 yen ÷ 125 yen/dollar = $20,000

Question 13

An American investor purchasing a Japanese government bond

Accepted Answer

When an American investor purchases a Japanese government bond, they need to exchange their dollars for yen in order to make the purchase. This creates a demand for yen and a supply of dollars in the foreign exchange market. As a result, the value of the yen may appreciate relative to the dollar.

Question 14

If the exchange rate between the U.S. dollar and the Japanese yen was 1 U.S. dollar equals 80 yen, what would be the price in dollars of Japanese automobiles selling for 2,400,000 yen?

Accepted Answer

The answer of If the exchange rate between the U.S....

Question 15

If the exchange rate between the U.S. dollar and the Mexican peso went from $1 US = 9 peso to $1 US = 10 peso, then

Accepted Answer

The answer of If the exchange rate between the U.S....

Question 16

If the exchange rate between the U.S. dollar and the Japanese yen went from $1 US = 100 yen to $1 US = 80 yen, then

Accepted Answer

A decrease in the exchange rate means that the U.S. dollar is now worth less in relation to the Japanese yen. Therefore, it will require more dollars to purchase the same amount of yen. This means that Japanese goods have become more expensive for Americans.

Question 17

A depreciation of one's currency means that

Accepted Answer

The answer of A depreciation of one's currency means that
...

Question 18

If the dollar appreciates,

Accepted Answer

The answer of If the dollar appreciates,
...

Question 19

A Japanese automobile manufacturer building an auto plant in the United States creates a

Accepted Answer

The Japanese automobile manufacturer will need to exchange yen for dollars to finance the construction and operation of the auto plant in the United States, creating a demand for dollars and a supply of yen in the foreign exchange market. This is because companies typically need to use the local currency of the country in which they are operating to pay for expenses such as labor, materials, and utilities.

Question 20

If the exchange rate between the U.S. dollar and the euro was 1.20 ($1.20 = one euro), what would be the price in dollars of a bottle of French wine selling for 40 euro?

Accepted Answer

To convert euro to dollar, we need to multiply by the exchange rate (1.20). Thus, 40 euros = 40 x 1.20 = $48.

Quiz 19: International Finance and the Foreign Exchange Market

Other things constant, if Americans suddenly increased their desire to vacation in Mexico, the dollar price of the Mexican peso would

Other things constant, if Americans suddenly decreased their desire for Mexican tequila, the exchange rate value of the Mexican peso would

If a U.S. dollar exchanges for 0.6 English pounds, the dollar price of a pound is

If the exchange rate between the U.S. dollar and the Russian ruble was 0.04 ($0.04 = one ruble) , what would be the price in dollars of a bottle of Russian wine selling for 2,000 ruble?

A pair of Nike tennis shoes costs $90 in the United States. If the exchange rate between the United States and Mexico is 0.10 ($0.10 = 1 peso) , then that same pair of shoes would cost ____ pesos.

An appreciation of a nation's currency means that

If the exchange rate between the U.S. dollar and the English pound went from $1.46 US = 1 pound to $1.60 US = 1 pound, then

An appreciation in the U.S. dollar benefits which of the following groups of people?

Suppose U.S.-produced wheat costs $5 per bushel and the exchange rate is 100 yen = $1. If the exchange rate changes to 90 yen = $1, the

If the exchange rate between the U.S. dollar and the European euro went from $1.20 US = 1 euro to $1.10 US = 1 euro, then

An appreciation of one's currency means that

If the exchange rate between the U.S. dollar and the Japanese yen was 1 U.S. dollar equals 125 yen, what would be the price in dollars of Japanese automobiles selling for 2,500,000 yen?

An American investor purchasing a Japanese government bond

If the exchange rate between the U.S. dollar and the Japanese yen was 1 U.S. dollar equals 80 yen, what would be the price in dollars of Japanese automobiles selling for 2,400,000 yen?

If the exchange rate between the U.S. dollar and the Mexican peso went from $1 US = 9 peso to $1 US = 10 peso, then

If the exchange rate between the U.S. dollar and the Japanese yen went from $1 US = 100 yen to $1 US = 80 yen, then

A depreciation of one's currency means that

If the dollar appreciates,

A Japanese automobile manufacturer building an auto plant in the United States creates a

If the exchange rate between the U.S. dollar and the euro was 1.20 ($1.20 = one euro) , what would be the price in dollars of a bottle of French wine selling for 40 euro?