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A depreciation of the dollar refers to:

An increase in the dollar price of foreign currency

If it takes 113.28 yen to buy $1, it takes $.009624 to buy 1 yen.

False

When the dollar depreciates:

U.S. exporters tend to sell more goods in foreign markets More foreign tourists can afford to visit the United States

An appreciation in the value of the U.S. dollar against the British pound would tend to:

Discourage the British from buying American goods

Given an upward-sloping supply schedule of pounds and a downward-sloping demand schedule for pounds, an increase in the demand schedule causes an appreciation of the dollar against the pound.

FAlse

During the era of dollar appreciation, in the 1980s, a main reason why the dollar did not fall in value was:

Flows of foreign investment into the United States

When the dollar gets stronger

Foreign tourists travel in the U.S. at a higher cost

when the dollar gets stronger

Foreign tourists travel in the US at a higher cost

Which of the following tends to cause the U.S. dollar to appreciate in value?

Rapid economic growth in foreign countries

A person needing foreign exchange immediately would purchase it on the spot market

T

Hedging is the process of avoiding are converging of foreign exchange

T

2. If U.S. visitors to Mexico can buy more goods in Mexico than they can in the United States when they convert their dollars to pesos, is the dollar undervalued or overvalued? Explain.

The dollar is overvalued and the peso is undervalued. The dollar buys "too many" pesos when it is converted.

1. Suppose the U.S. dollar-euro exchange rate is 1.20 dollars per euro, and the U.S. dollar-Mexican peso rate is 0.10 dollar per peso. What is the euro-peso rate?

The euro-peso rate is (0.1 dollar per peso)/(1.2 dollars per euro)=0.083 euro per Mexican peso

The supply of foreign currency may be:

Vertical ​

When the dollar depreciates

check answer

which of the following tends to cause the US dollar to appreciate in value

rapid economic growth in foreign countries

The nominal exchange rate is the

​the price of one country's currency in terms of another country's currency