Question 1

Suppose that prices in the United States rise relative to prices in France.We expect that (on the foreign exchange market)the demand for U.S.dollars will __________ and the supply of dollars will __________.

Accepted Answer

As prices in the United States rise relative to prices in France, U.S. goods will become relatively more expensive, making them less attractive to foreign buyers. As a result, demand for U.S. dollars will decrease, meaning that people will be less willing to exchange their currency for dollars. On the supply side, U.S. citizens and businesses may now have an incentive to buy more French goods, leading to an increase in the supply of dollars on the foreign exchange market. Therefore, we can expect that the demand for U.S. dollars will decrease while the supply of dollars will increase.

Question 2

The U.S.dollar has depreciated relative to the Japanese yen if it takes

Accepted Answer

The answer of The U.S.dollar has depreciated relative to the...

Question 3

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?

Accepted Answer

The lower the dollar amount needed to purchase a peso, the more pesos an American buyer can get for their dollars, making Mexican goods cheaper for them. Therefore, an exchange rate of $0.04 = 1 peso (D) is most preferable for an American buyer of Mexican goods.

Question 4

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11.If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have __________ and the dollar to have __________.

Accepted Answer

When 1 peso was equal to $0.11, the dollar was able to buy more pesos. However, when the peso's value decreases to 1 peso = $0.10, the dollar can now buy more pesos, implying that the peso has depreciated and the dollar has appreciated.

Question 5

Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?

Accepted Answer

When $0.10 equals 1 peso, the peso is stronger relative to the dollar compared to the other options, meaning the Mexican buyer would get more for their money when purchasing American goods.

Question 6

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

Accepted Answer

The answer of In a foreign exchange market diagram with...

Question 7

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be __________ and the price of the raincoat in dollars will be __________.

Accepted Answer

To find the price of the television in pesos, we can multiply the dollar price by the exchange rate: $500 x 10 pesos/$1 = 5000 pesos. To find the price of the raincoat in dollars, we can divide the peso price by the exchange rate: 700 pesos ÷ 10 pesos/$1 = $70. Therefore, the correct answer is A.

Question 8

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________ and the yen will __________.

Accepted Answer

If the equilibrium exchange rate is $0.01 = 1 yen but the current exchange rate is $0.009 = 1 yen, this means that the U.S. dollar is undervalued relative to the Japanese yen. In a flexible exchange rate system, market forces will push the exchange rate towards the equilibrium rate. This implies that the dollar price of a yen will increase (since the dollar is undervalued) and the yen will appreciate (since it is currently undervalued). Therefore, the correct choice is A, increase and appreciate.

Question 9

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.007 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________,and the yen will __________.

Accepted Answer

A higher exchange rate ($1 = fewer yen) means that the dollar is overvalued compared to the yen, which should encourage Americans to buy more Japanese goods and Japanese to buy fewer American goods. This increased demand for yen should lead to an appreciation of the yen (i.e. the price of a yen in terms of dollars increases). Conversely, the dollar should depreciate (i.e. the price of a dollar in terms of yen decreases) until the equilibrium exchange rate is reached.

Question 10

If the average income per U.S.worker decreases while that of Japanese workers remains unchanged,then the demand curve for Japanese yen will shift __________,which will cause the equilibrium exchange rate of the dollar price per yen to __________,which is the same thing as saying that the dollar will __________.

Accepted Answer

The answer of If the average income per U.S.worker decreases...

Question 11

Suppose that an American-made pair of blue jeans has a price of $80.If the exchange rate is $0.095 = 1 peso,then a Mexican consumer would have to pay approximately __________ pesos to purchase the blue jeans,but if the exchange rate is $0.085 = 1 peso,then a Mexican consumer would have to pay _________ pesos to purchase the blue jeans.

Accepted Answer

The answer of Suppose that an American-made pair of blue...

Question 12

The more dollars that must be given up to buy one British pound,the __________ American goods are for the British and the __________ American goods the British will buy;thus __________ dollars will be demanded.

Accepted Answer

The answer of The more dollars that must be given...

Question 13

Suppose that prices in France increase by 8 percent while prices in the United States remain relatively stable.We would expect that (on the foreign exchange market)the demand for U.S.dollars will __________ and the supply of U.S.dollars will __________.

Accepted Answer

The answer of Suppose that prices in France increase by...

Question 14

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

Accepted Answer

In a foreign exchange market diagram where the exchange rate is expressed as dollars per peso, the quantity axis (horizontal) represents the amount of pesos being traded. The U.S. demand for Mexican goods would increase the demand for pesos to pay for these goods, thus affecting the demand curve.

Question 15

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________,and the dollar will __________.

Accepted Answer

If the equilibrium exchange rate is higher than the current exchange rate, the dollar must appreciate (increase) in order to reach the equilibrium rate. This will lead to an increase in the dollar price of a yen. Therefore, the best option is (C) increase; depreciate.

Question 16

An American computer is priced at $1,200.If the exchange rate between the U.S.dollar and the Japanese yen is $0.01 per yen,the equivalent price of the computer in yen is approximately __________ yen.

Accepted Answer

The answer of An American computer is priced at $1,200.If...

Question 17

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen but currently the exchange rate is $0.0089 = 1 yen,then a __________ exists.

Accepted Answer

When the current exchange rate is lower than the equilibrium rate ($0.0089 < $0.01), it means that yen is cheaper than it should be, indicating a surplus of dollars (people have more dollars they want to exchange for yen) and a shortage of yen (there's not enough yen available at this price for all the dollars people want to exchange).

Question 18

As the dollar price of the Mexican peso falls,the __________ Mexican goods will be for Americans to purchase and the __________ Mexican goods Americans will buy;thus __________ pesos will be demanded.

Accepted Answer

When the dollar price of the Mexican peso falls, it means that the peso is cheaper in terms of dollars. This makes Mexican goods less expensive for Americans, leading them to buy more Mexican goods. As a result, more pesos will be demanded to facilitate these purchases.

Question 19

Suppose that prices in Japan increase by 8 percent while prices in the United States remain stable.We would expect that the result would be that in the foreign exchange market ___________________________,​ceteris paribus​.

Accepted Answer

When prices in Japan increase relative to prices in the United States, the value of the yen relative to the dollar decreases because it now takes more yen to buy the same amount of goods. This leads to the dollar appreciating and the yen depreciating in the foreign exchange market, assuming all other factors remain constant (ceteris paribus).

Question 20

Suppose that prices in the United States rise relative to prices in Japan.We expect that

Accepted Answer

If prices in the United States rise relative to prices in Japan, it means that goods in the US will become relatively more expensive compared to Japan. This will result in a decrease in demand for US goods and an increase in demand for Japanese goods, causing the value of the dollar to depreciate and the yen to appreciate.

Quiz 22: International Trade

Suppose that prices in the United States rise relative to prices in France.We expect that (on the foreign exchange market) the demand for U.S.dollars will and the supply of dollars will .

The U.S.dollar has depreciated relative to the Japanese yen if it takes

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11.If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have and the dollar to have .

Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be and the price of the raincoat in dollars will be .

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will and the yen will .

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.007 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will ,and the yen will .

If the average income per U.S.worker decreases while that of Japanese workers remains unchanged,then the demand curve for Japanese yen will shift ,which will cause the equilibrium exchange rate of the dollar price per yen to ,which is the same thing as saying that the dollar will __.

The more dollars that must be given up to buy one British pound,the American goods are for the British and the American goods the British will buy;thus __ dollars will be demanded.

Suppose that prices in France increase by 8 percent while prices in the United States remain relatively stable.We would expect that (on the foreign exchange market) the demand for U.S.dollars will and the supply of U.S.dollars will .

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will ,and the dollar will .

An American computer is priced at $1,200.If the exchange rate between the U.S.dollar and the Japanese yen is $0.01 per yen,the equivalent price of the computer in yen is approximately __________ yen.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen but currently the exchange rate is $0.0089 = 1 yen,then a __________ exists.

As the dollar price of the Mexican peso falls,the Mexican goods will be for Americans to purchase and the Mexican goods Americans will buy;thus __ pesos will be demanded.

Suppose that prices in Japan increase by 8 percent while prices in the United States remain stable.We would expect that the result would be that in the foreign exchange market ___________________________,ceteris paribus.

Suppose that prices in the United States rise relative to prices in Japan.We expect that

Quiz 22: International Trade

Suppose that prices in the United States rise relative to prices in France.We expect that (on the foreign exchange market) the demand for U.S.dollars will __________ and the supply of dollars will __________.

The U.S.dollar has depreciated relative to the Japanese yen if it takes

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11.If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have __________ and the dollar to have __________.

Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be __________ and the price of the raincoat in dollars will be __________.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________ and the yen will __________.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.007 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________,and the yen will __________.

The more dollars that must be given up to buy one British pound,the __________ American goods are for the British and the __________ American goods the British will buy;thus __________ dollars will be demanded.

Suppose that prices in France increase by 8 percent while prices in the United States remain relatively stable.We would expect that (on the foreign exchange market) the demand for U.S.dollars will __________ and the supply of U.S.dollars will __________.

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of __________ would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the __________ curve.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________,and the dollar will __________.

An American computer is priced at $1,200.If the exchange rate between the U.S.dollar and the Japanese yen is $0.01 per yen,the equivalent price of the computer in yen is approximately __________ yen.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen but currently the exchange rate is $0.0089 = 1 yen,then a __________ exists.

As the dollar price of the Mexican peso falls,the __________ Mexican goods will be for Americans to purchase and the __________ Mexican goods Americans will buy;thus __________ pesos will be demanded.

Suppose that prices in Japan increase by 8 percent while prices in the United States remain stable.We would expect that the result would be that in the foreign exchange market ___________________________,​ceteris paribus​.

Suppose that prices in the United States rise relative to prices in Japan.We expect that

Suppose that prices in the United States rise relative to prices in France.We expect that (on the foreign exchange market) the demand for U.S.dollars will and the supply of dollars will .

Suppose that the exchange rate between the U.S.dollar and the Mexican peso is 1 peso = $0.11.If the U.S.dollar price per Mexican peso changes to 1 peso =$0.10,the peso is said to have and the dollar to have .

In a foreign exchange market diagram with pesos per dollar on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos.If the exchange rate is $0.10 = 1 peso,then the price of the television in pesos will be and the price of the raincoat in dollars will be .

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will and the yen will .

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.007 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will ,and the yen will .

The more dollars that must be given up to buy one British pound,the American goods are for the British and the American goods the British will buy;thus __ dollars will be demanded.

Suppose that prices in France increase by 8 percent while prices in the United States remain relatively stable.We would expect that (on the foreign exchange market) the demand for U.S.dollars will and the supply of U.S.dollars will .

In a foreign exchange market diagram with dollars per peso on the vertical axis,the quantity of would be on the horizontal axis,and the U.S.demand for Mexican goods would help to determine the curve.

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.008 = 1 yen,but currently the exchange rate is $0.007 = 1 yen,then with flexible exchange rates the dollar price of a yen will ,and the dollar will .

As the dollar price of the Mexican peso falls,the Mexican goods will be for Americans to purchase and the Mexican goods Americans will buy;thus __ pesos will be demanded.

Suppose that prices in Japan increase by 8 percent while prices in the United States remain stable.We would expect that the result would be that in the foreign exchange market ___________________________,ceteris paribus.