# international trade & finance: chapter 12 (Quiz 5), Econ Final, Econ, Ch12, Chapter 11: Foreign Exchange, EC3100 Final, Econ 335 final exam ch.10, econ practice: balance-of-payments

Suppose that the exchange value of the dollar currently equals 100 yen. As a result of changing economic conditions, suppose that people anticipate that the dollar will be worth 120 yen in three months. This expectation results in​:
(a) ​an increase in the value of U.S. exports to Japan
(b) ​an increase in the demand for the yen
(c)​ a decrease in the demand for dollars
(d)​ an increase in the demand for dollars
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Suppose that the exchange value of the dollar currently equals 100 yen. As a result of changing economic conditions, suppose that people anticipate that the dollar will be worth 120 yen in three months. This expectation results in​:
(a) ​an increase in the value of U.S. exports to Japan
(b) ​an increase in the demand for the yen
(c)​ a decrease in the demand for dollars
(d)​ an increase in the demand for dollars
Given a system of floating exchange rates, stronger U.S. preferences for imports would trigger:
(a)An increase in the demand for imports and an increase in the demand for foreign currency
(b)An increase in the demand for imports and a decrease in the demand for foreign currency
(c)A decrease in the demand for imports and an increase in the demand for foreign currency
(d)A decrease in the demand for imports and a decrease in the demand for foreign currency
The demand curve for euros in the foreign exchange market will increase (shift rightward) if​
(a)European interest rates fall relative to foreign interest rates
(b)​the current exchange value of the euro depreciates
(c)Europe increases tariffs and applies more stringent quotas on imported goods
(d)​the rate of inflation in Europe is less than the rate of inflation throughout the world
If Mexico's labor productivity rises relative to Europe's labor productivity:
(a)The peso tends to depreciate against the euro in the short run
(b)The peso tends to appreciate against the euro in the short run
(c)The peso tends to depreciate against the euro in the long run
(d)The peso tends to appreciate against the euro in the long run
If economic growth perks up in the United States so that investors think they can realize larger profits from American assets, the
(a)​ supply of U.S. dollars will increase in the foreign exchange market
(b) ​the demand for U.S. dollars will increase in the foreign exchange market
(c) ​the demand for U.S. dollars will decrease in the foreign exchange market
(d) the demand for U.S. dollars will remain constant in the foreign exchange market
Assume that interest rates in the United States and Britain are the same. If a U.S. resident anticipates that the exchange value of the dollar is going to appreciate against the pound, she should:
(a) Borrow needed funds from British banks rather than U.S. banks
(b)Borrow needed funds from U.S. banks rather than British banks
(c) Convert U.S. dollars into British pounds
(d) Any of the above
Hyundai Inc is a South Korean company that manufactures automobiles. If Hyundai purchases sheet steel from U.S. Steel Inc.,​
(a) ​the demand for dollars increases and the dollar appreciates against the won
(b) ​the demand for dollars increases and the dollar depreciates against the won
(c)​the demand for dollars decreases and the dollar appreciates against the won
(d) ​the demand for dollars decreases and the dollar depreciates against the won
Which of the following will result in a depreciation of the U.S. dollar against the Mexican peso?​
(a) ​an increase in the Mexican demand for U.S. imports
(b)​a decrease in the Mexican demand for U.S. imports
(c)​a decrease in the U.S. demand for Mexican imports
(d)​no change in the U.S. demand for Mexican imports