Solved by verified expert :21. Shifts in demand away from French products and
toward U.S. products (caused by forces other than changes in the
exchange rate) would result in extra attempts to __________ euros and
__________ dollars.
a. Buy; buy
b. Sell; sell
c. Sell; buy
d. Buy; sell
22. Other things equal, if American
exports to Japan increase and American imports from Japan decrease,
then under a floating exchange rate system, we would expect the dollar to:
a. Weaken against the Japanese
yen.
b. Depreciate against the
Japanese yen.
c. Devalue against the
Japanese yen.
d. Strengthen against the
Japanese yen.
23. A decrease in German residents’ willingness to
invest in dollar-denominated assets will shift the demand curve for:
a. Euros to the right.
b. Euros to the left.
c. Dollars to the right.
d. Dollars to the left.
24. In a __________ exchange rate system the government
or central bankers intervene to keep the exchange rate virtually steady.
a. Fixed
b. Market driven
c. Floating
d. Forward
26. Referring to Figure 17.1, at $2.50 per pound, there
is a(n) __________. Under the system of flexible exchange rates, this would
cause __________ the ________ curve(s).
a. Excess demand of 1 million pounds, leftward shift
of, demand
b. Excess supply of 1 million pounds, rightward shift
of, supply
c. Excess demand of 1 million pounds, downward
movement along, demand & supply
d. Excess supply of 1 million pounds, downward
movement along, demand & supply
27. Referring to Figure 17.1, if the British government
wants to peg the exchange rate of the pound at $2.50 per pound, what action
would British monetary authorities have to undertake?
a. Sell 1 million pounds and buy 2.5 million dollars.
b. Buy 1 million pounds and sell 1 million dollars.
c. Buy 1 million pounds and sell 2.5 million dollars.
d. Buy 5.5 million pounds and sell 11 million dollars.
28. Referring to Figure 17.1, if the British pound is
pegged at $2.50 per pound the pound will be:
a. Overvalued.
b. Undervalued.
c. Devalued.
d. In equilibrium.
29. Referring to Figure 17.1, if the British pound is
pegged at $2.50 per pound who will this help?
a. US importers.
b. British importers.
c. British exporters.
d. British import-competing producers.
30. Referring to Figure 17.1, if the British pound is
pegged at $2.50 per pound and the government gives up the peg and allows the
pound to float, the pound will experience a(n):
a. Revaluation.
b. Devaluation.
c. Appreciation.
d. Depreciation.
