If currency traders expect the value of the dollar to rise, what
effect will this have on the demand for dollars and the supply of
dollars in the foreign exchange market?
|
a. |
Demand for dollar will increase, and supply of dollars will
remain constant
|
|
b. |
Demand for dollars will decrease, and supply of dollars will
decrease
|
|
c. |
Demand for dollars will increase, and supply of dollars will
increase
|
|
d. |
Demand for dollars will increase, and supply of dollars will
decrease
|
|
e. |
Demand for dollars will decrease, and supply of dollars will
increase
|
Initially the exchange rate between the Australian dollar and
yen is ¥80=A$1. Suppose that the exchange rate changes to ¥75 =
A$1. Other things being equal, because of the change,
__________.
|
a. |
Japan will import more Australian products
|
|
b. |
Japan will import less Australian products
|
|
c. |
Australia will import fewer Japanese products
|
|
d. |
Both (a) and (c) are correct correct
|
|
e. |
Both (b) and (c) are correct
|
If a country’s current account has a $200 million surplus and
its capital account balance has a $30 million deficit, then its
financial account balance must have a _____________.
|
|
$200 million deficit
|
|
|
$170 million deficit correct
|
|
|
$230 million deficit
|
|
|
$230 million surplus
|
|
|
$170 million surplus
|
If currency traders expect the value of the dollar to rise, what
effect will this have on the demand for dollars and the supply of
dollars in the foreign exchange market?
|
a. |
Demand for dollar will increase, and supply of dollars will
remain constant
|
|
b. |
Demand for dollars will decrease, and supply of dollars will
decrease
|
|
c. |
Demand for dollars will increase, and supply of dollars will
increase
|
|
d. |
Demand for dollars will increase, and supply of dollars will
decrease
|
|
e. |
Demand for dollars will decrease, and supply of dollars will
increase
|
A country’s current account balance will deteriorate if
___________.
|
a. |
it receives more dividends from its overseas investments
|
|
b. |
it receives less dividends from its overseas investments
|
|
c. |
it pays less dividends to foreign investors
|
|
d. |
Both (a) and (c) are correct.
|
|
e. |
Both (b) and (c) are correct. |
