ch 16
In 2009, 1 US dollar purchased 1400 korean won and in 2013 it purchased 900 korean won. How much did 1000 KOrean won cost in US dollars in 2009 and 2013
2009: .71 dollars, 2013: 1.11 dollars
In 2010, 1 swiss franc cost .56 British pounds and in 2012 it cost .51 british pounds. How much would 1 british pound purchase in swiss francs in 2010 and 2012?
2010: 1.79 francs, 2012: 1.96 francs
In 2010, 100 Japanese yen purchased .88 U.S. dollars and in 2013, it purchased .93 U.S. dollars. How much was 1 U.S. dollar worth in Japanese yen, in 2010 and 2013?
2010: 113.6 yen, 2013: 107.5 yen
In 2010, 1 US dollar bought 8.24 chinese yuan and in 2012 it bought 6.64 chinese yuan. How many US dollars could 1 chinese yuan purchase in 2010 and 2012
2010:.12 US dollars; 2012: .15 US dollars
The most commonly traded currency in foreign exchange markets is the
US dollar
what do the economies of Greece, Ireland and germany all share?
a common currency
If american airlines were to purchase Malaysian airlines, it would likely have _ in mind
a longer-term horizon
short run speculation in currencies can create _, at least for a time, where an expected
a self-fullfilling prophecy
one of the following groups is not participating in the foreign exchange markets. Which one?
an iowa travel firm that arranges vacation tours for local seniors to Hawaii
if the US government uses an expansionary monetary policy to reduce interest rates, then it will
cause the exchange rate for US curency to depreciate
A _ monetary policy can be used to decrease aggregate demand because it _ exports and _ imports
contractionary; reduces; stimulates
the _ is an example of a large-scale common currency
euro
a central bank must be concerned about whether a large and unexpected _ will drive most of the country's existing banks into bankruptcy
exchange rate depreciation
Portfolio investments are often made based on beliefs about how _ are likely to move in the near future
exchange rates or rates of return
If a central bank focuses on preventing either high inflation or deep recession by using low and reasonably steady interest rate policy, then
exchange rates will have less reason to vary
A stronger British pound is beneficial for:
exchange students with a British scholarship studying in Canada.
from a macroeconomic point of view, increases in _ are an addition to aggregate demand, while increases in _ are a subtraction from aggregate dmeand
exports; imports
which of the following is no longer one of the most commonly traded currencies in the foreign exchange markets?
french franc
If a government uses monetary policy to alter the exchange rate, then it cannot at the same time use monetary policy to address issues of _.
inflation or recession
If the canadian dollar is strengthening, then:
it has appreciated in terms of other currencies
why would an expansionary monetary policy no longer be available to combat recession for a country that has pegged its exchange rate
it would depreciate the country's exchange rate and break its hard peg
_ equalizes the prices of intenrationally taded goods across countries
purchasing power parity
when a government uses a _ exchange rate policy, it usually allows the exchange rate to be set by the market
soft peg
a _ policy in which the government almost never acts to intervene in the exchange rate market will look a great deal like a floating exchange rate
soft peg exchange rate
if 1 US dollar bought 1.40 canadian dollars in 2006 and in 2010 it bought 1 canadian dollar then
the canadian dollar appreciated against the US dollar
the canadian dollar will most likely strengthen against the US dollar if
the canadian inflation rate become extremely low
If 112 japanese yen purchased 1 US dollar in 2008 and 83 japanese yen purchased 1 US dollar in 2009 then
the dollar depreciated against the yen
when mataeo buys euros through _, he will use his US dollars to pay for them
the foreign exchange market
Referring to the diagram above, which of the following statements is true
this expansionary monetary policy shift also includes the effect of exchange rates on exports and imports
a soft peg exchange rate may create additional _ as exchange rate markets try to anticipate when and how the government will intervene
volatility