Question 1

A fixed exchange rate is an exchange rate whose value

Accepted Answer

A fixed exchange rate is set by official government policy, where the government commits to buying or selling its own currency at a predetermined rate in the foreign exchange market. This contrasts with a floating exchange rate, where the exchange rate is determined by supply and demand in the market. The law of one price and comparative advantage may influence exchange rates, but they do not determine them under a fixed exchange rate system. The International Monetary Fund may provide guidance or assistance with exchange rate policies, but it does not establish them annually.

Question 2

An increase in the value of a currency relative to other currencies is called a(n)

Accepted Answer

Appreciation refers to an increase in the value of a currency relative to other currencies. It means that one unit of the currency can buy more units of another currency.

Question 3

The nominal exchange rate is the

Accepted Answer

The nominal exchange rate is the rate at which two currencies can be traded for each other. It represents the price of one currency in terms of another currency. The other options do not accurately describe the nominal exchange rate.

Question 4

The following table provides nominal exchange rates for the Canadian dollar: 
Based on these data,the nominal exchange rate equals _________ Iraqi dinars per Japanese yen or __________ yen per dinar.

Accepted Answer

The answer of The following table provides nominal exchange rates...

Question 5

When it costs more than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

Accepted Answer

When it costs more than a dollar U.S. to buy a dollar Canadian, the Canadian dollar is trading above parity, meaning it is valued higher than the U.S. dollar.

Question 6

A decrease in the value of a currency relative to other currencies is called a(n)

Accepted Answer

A decrease in the value of a currency relative to other currencies is called depreciation. Revaluation refers to an increase in the value of a currency. Devaluation refers to a deliberate decrease in the value of a currency by the government. Appreciation refers to an increase in the value of a currency in a free-floating exchange rate system. Overvaluation refers to a currency's value being too high relative to its fundamental economic value.

Question 7

A flexible exchange rate is an exchange rate whose value

Accepted Answer

A flexible exchange rate is one whose value is determined by the forces of supply and demand for the currency in the foreign exchange market, without any interference from government policies or regulations. Therefore, the correct answer is B.

Question 8

If the nominal exchange rate is 0.5434 British pounds per dollar,and is 0.02482 dollars per Indian rupee,then there are _________ Indian rupees per dollar,and __________ dollars per British pound.

Accepted Answer

To find Indian rupees per dollar, divide 1 by the dollar to rupee rate: 1 / 0.02482 = 40.29. To find dollars per British pound, divide 1 by the pound to dollar rate: 1 / 0.5434 = 1.840.

Question 9

The following table provides the nominal exchange rates for the Canadian dollar: 
Based on these data,the nominal exchange rate equals _________ reals per euro or __________ euros per real.

Accepted Answer

The answer of The following table provides the nominal exchange...

Question 10

When it costs less than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

Accepted Answer

When it costs less than a dollar U.S. to buy a dollar Canadian, the Canadian dollar is trading below parity, meaning it is worth less than the U.S. dollar.

Question 11

When one unit of one currency trades on the foreign exchange market for one unit of another currency,this is called

Accepted Answer

When one unit of one currency trades on the foreign exchange market for one unit of another currency, this is called parity. It means that the two currencies are equal in value and can be exchanged without any gain or loss. This is also known as a "one-for-one" exchange rate.

Question 12

If the nominal exchange rate is 0.976 Swiss francs per dollar,and is 1.939 Brazilian reals per Swiss franc,then there are _________ Brazilian reals per dollar.

Accepted Answer

To find the Brazilian reals per dollar, multiply the exchange rates: 0.976 Swiss francs per dollar * 1.939 Brazilian reals per Swiss franc = 1.892 Brazilian reals per dollar.

Question 13

A currency depreciation is a(n)

Accepted Answer

A currency depreciation is when a currency decreases in value relative to other currencies. This can happen due to factors such as inflation, political instability, or a trade deficit. The opposite of a currency depreciation is a currency appreciation, where a currency increases in value relative to other currencies.

Question 14

The following table provides the nominal exchange rates for the Canadian dollar: 
Based on these data,the nominal exchange rate equals _________ pesos per Canadian dollar or __________ Canadian dollars per peso.

Accepted Answer

The answer of The following table provides the nominal exchange...

Question 15

An exchange rate that varies according to the supply and demand for the currency in the foreign exchange market is called a(n)__________ exchange rate.

Accepted Answer

A flexible exchange rate system allows the exchange rate to vary according to market forces of supply and demand. In this system, the value of a currency is not fixed and can be influenced by various factors such as inflation, interest rates, and political stability. Therefore, a flexible exchange rate is also known as a floating exchange rate. Options A and B (overvalued and undervalued) refer to the perceived value of a currency, which is subjective and not related to the exchange rate system. Option C (fixed exchange rate) refers to a system where the value of a currency is pegged to another currency or a basket of currencies, and the exchange rate is fixed. Option E (real exchange rate) refers to the exchange rate that reflects the relative prices of goods and services between two countries.

Question 16

The following table provides nominal exchange rates for the Canadian dollar: 
Based on these data,the nominal exchange rate equals _________ pounds per euro or __________ euros per pound.

Accepted Answer

To find the exchange rate between pounds and euros, we need to use the exchange rate between each currency and the Canadian dollar. We can then calculate the cross-rate between pounds and euros.

From the table, we see that 1 Canadian dollar is equal to 0.844 pounds and 1 Canadian dollar is equal to 1.184 euros.

To find the exchange rate between pounds and euros, we divide the exchange rate of pounds by the exchange rate of euros:

Exchange rate (pounds/euro) = Exchange rate (pounds/Canadian dollar) ÷ Exchange rate (euros/Canadian dollar)
Exchange rate (pounds/euro) = 0.844 ÷ 1.184
Exchange rate (pounds/euro) = 0.711

Therefore, the nominal exchange rate equals 0.844 pounds per euro or 1.411 euros per pound (which is the reciprocal of 0.711).

The closest choice is D, with an exchange rate of 0.844 pounds per euro, which matches our calculation.

Question 17

If the nominal exchange rate is 3.045 Polish zloty per U.S.dollar,and is 3.397 South African rand per Polish zloty,then there are _________ South African rand per U.S.dollar.

Accepted Answer

To find the exchange rate from U.S. dollars to South African rand, multiply the exchange rates: 3.045 zloty/USD * 3.397 rand/zloty = 10.344 rand/USD.

Question 18

If the nominal exchange rate is 1.235 Canadian dollars per U.S.dollar,and is 10.663 Mexican pesos per Canadian dollar,then there are _________ Mexican pesos per U.S.dollar.

Accepted Answer

To solve the problem, we need to convert Canadian dollars to U.S. dollars and then to Mexican pesos.

1 U.S. dollar = 1.235 Canadian dollars

Therefore, 1 Canadian dollar = 1 / 1.235 U.S. dollars

1 Canadian dollar = 0.8097 U.S. dollars

10.663 Mexican pesos = 1 Canadian dollar

So, 10.663 Mexican pesos = 0.8097 U.S. dollars

To find out how many Mexican pesos per U.S. dollar:

1 U.S. dollar = (10.663 Mexican pesos) / (0.8097 U.S. dollars)

1 U.S. dollar = 13.169 Mexican pesos

Therefore, the answer is E: 13.169.

Question 19

A currency appreciation is a(n)

Accepted Answer

A currency appreciation refers to an increase in the value of a currency relative to other currencies. This means that a unit of the appreciating currency can buy more units of other currencies than before.

Question 20

The rate at which two currencies can be traded for each other is called the _________ exchange rate.

Accepted Answer

The nominal exchange rate refers to the rate at which one currency can be exchanged for another. It is the most commonly used exchange rate in international trade and finance. The other options are not accurate descriptions of the exchange rate. Flexible exchange rates allow for market forces to determine the exchange rate, while fixed exchange rates are set by governments. Fundamental exchange rates are based on economic fundamentals such as interest rates and inflation, while real exchange rates adjust for inflation.

Quiz 13: Savings, Capital Formation and Comparative Economic Growth

A fixed exchange rate is an exchange rate whose value

An increase in the value of a currency relative to other currencies is called a(n)

The nominal exchange rate is the

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ Iraqi dinars per Japanese yen or __ yen per dinar.

When it costs more than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

A decrease in the value of a currency relative to other currencies is called a(n)

A flexible exchange rate is an exchange rate whose value

If the nominal exchange rate is 0.5434 British pounds per dollar,and is 0.02482 dollars per Indian rupee,then there are _ Indian rupees per dollar,and __ dollars per British pound.

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ reals per euro or __ euros per real.

When it costs less than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

When one unit of one currency trades on the foreign exchange market for one unit of another currency,this is called

If the nominal exchange rate is 0.976 Swiss francs per dollar,and is 1.939 Brazilian reals per Swiss franc,then there are _________ Brazilian reals per dollar.

A currency depreciation is a(n)

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ pesos per Canadian dollar or __ Canadian dollars per peso.

An exchange rate that varies according to the supply and demand for the currency in the foreign exchange market is called a(n) __________ exchange rate.

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ pounds per euro or __ euros per pound.

If the nominal exchange rate is 3.045 Polish zloty per U.S.dollar,and is 3.397 South African rand per Polish zloty,then there are _________ South African rand per U.S.dollar.

If the nominal exchange rate is 1.235 Canadian dollars per U.S.dollar,and is 10.663 Mexican pesos per Canadian dollar,then there are _________ Mexican pesos per U.S.dollar.

A currency appreciation is a(n)

The rate at which two currencies can be traded for each other is called the _________ exchange rate.

Quiz 13: Savings, Capital Formation and Comparative Economic Growth

A fixed exchange rate is an exchange rate whose value

An increase in the value of a currency relative to other currencies is called a(n)

The nominal exchange rate is the

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _________ Iraqi dinars per Japanese yen or __________ yen per dinar.

When it costs more than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

A decrease in the value of a currency relative to other currencies is called a(n)

A flexible exchange rate is an exchange rate whose value

If the nominal exchange rate is 0.5434 British pounds per dollar,and is 0.02482 dollars per Indian rupee,then there are _________ Indian rupees per dollar,and __________ dollars per British pound.

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _________ reals per euro or __________ euros per real.

When it costs less than a dollar U.S.to buy a dollar Canadian,the Canadian dollar is said to be

When one unit of one currency trades on the foreign exchange market for one unit of another currency,this is called

If the nominal exchange rate is 0.976 Swiss francs per dollar,and is 1.939 Brazilian reals per Swiss franc,then there are _________ Brazilian reals per dollar.

A currency depreciation is a(n)

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _________ pesos per Canadian dollar or __________ Canadian dollars per peso.

An exchange rate that varies according to the supply and demand for the currency in the foreign exchange market is called a(n) __________ exchange rate.

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _________ pounds per euro or __________ euros per pound.

If the nominal exchange rate is 3.045 Polish zloty per U.S.dollar,and is 3.397 South African rand per Polish zloty,then there are _________ South African rand per U.S.dollar.

If the nominal exchange rate is 1.235 Canadian dollars per U.S.dollar,and is 10.663 Mexican pesos per Canadian dollar,then there are _________ Mexican pesos per U.S.dollar.

A currency appreciation is a(n)

The rate at which two currencies can be traded for each other is called the _________ exchange rate.

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ Iraqi dinars per Japanese yen or __ yen per dinar.

If the nominal exchange rate is 0.5434 British pounds per dollar,and is 0.02482 dollars per Indian rupee,then there are _ Indian rupees per dollar,and __ dollars per British pound.

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ reals per euro or __ euros per real.

The following table provides the nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ pesos per Canadian dollar or __ Canadian dollars per peso.

The following table provides nominal exchange rates for the Canadian dollar: Based on these data,the nominal exchange rate equals _ pounds per euro or __ euros per pound.