ECO 110- Quiz 5

d

No government intervention in active markets for foreign currency is typical of a a. gold standard. b. fixed exchange rate system. c. managed float exchange rate system. d. floating exchange rate system.

a

In the market for a foreign currency, the curve that represents the "willingness of those who have foreign currency to trade them for the U.S. dollar" is the a. supply curve. b. price curve. c. demand curve. d. equilibrium curve.

a

In the market for euros, an increase in U.S. imports from Europe tends to a. increase equilibrium price. b. increase excess supply. c. cause no change in equilibrium price. d. decrease equilibrium price.

a

"Net transfers of private money" most often represent a. money sent home by foreign workers in the U.S. b. purchases by foreigners of physical capital in the U.S. c. purchases by foreigners of U.S. export goods. d. purchases of foreign-produced goods and services by U.S. citizens.

b

Continuous government intervention in markets for foreign currency is typical of a a. gold standard. b. fixed exchange rate system. c. managed float exchange rate system. d. floating exchange rate system.

d

If the market exchange rate of yen per dollar rises, this means the a. dollar has weakened, but the yen has not changed. b. yen has strengthened, and the dollar has weakened. c. dollar has strengthened, but the yen has not changed. d. dollar has strengthened, and the yen has weakened.

c

In the market for a foreign currency, a "strengthening" of the dollar corresponds to a a. higher dollar price of foreign currency. b. larger demand for the foreign currency. c. lower dollar price of foreign currency. d. smaller supply of the foreign currency.

b

In the market for a foreign currency, the curve that represents the "willingness of those who have U.S. dollars to trade them for the foreign currency" is the a. equilibrium curve. b. demand curve. c. supply curve. d. price curve.

a

The massive deficit in the U.S. current account primarily reflects the a. excess of U.S. imports over U.S. exports. b. transfers of money home by U.S. citizens working in other countries. c. excess of U.S. exports over U.S. imports. d. excess of foreign investment in the U.S. over domestic private investment.

d

To offset an increased demand for its currency, a government fixing its exchange rate a. must make it illegal to sell its currency. b. must increase the supply of the foreign currency. c. must sell gold or some other precious metal. d. must increase the supply of its currency.