quiz 15

In 2010, $1.00 U.S. bought 8.24 Chinese yuan and in 2012 it bought 6.64 Chinese yuan. How many U.S. dollars could 1 Chinese yuan purchase in 2010 and 2012?

2010: .12 U.S. dollars; 2012: .15 U.S. dollars

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

Which of the following is no longer one of the most commonly traded currencies in foreign exchange markets?

French franc

A stronger British pound is beneficial for:

exchange students with a British scholarship studying in Canada.

People or firms use one currency to purchase another currency at the _______________________.

foreign exchange market

Suppose the situation in which investors in the US are looking to Japan as a place where they should invest for a future high rate of return, while Japanese investors are looking to lower their investments in the US. The combined effect in the dollar exchange market will

shift the supply curve out, the demand curve shifts in and the value of the dollar decreases.

For firms engaged in international lending and borrowing, ____________________ can have an enormous effect on profits

swings in exchange rates

Foreign direct investment is the term used to describe purchases of firms in another country that involve ______________________.

taking a management responsibility

If $1.00 U.S. bought $1.40 Canadian dollars in 2006 and in 2010 it bought $1.00 Canadian dollar, then;

the Canadian dollar appreciated against the U.S. dollar.

A depreciating U.S. dollar is ________________ because it is worth ___________ in terms of other currencies.

weakening; less

If the U.S. government uses an expansionary monetary policy to reduce interest rates, then it will:

cause the exchange rate for U.S. currency to depreciate.

Portfolio investments are often made based on beliefs about how _______________ are likely to move in the near future.

exchange rates or rates of return

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

If 112 Japanese yen purchased $1.00 U.S. in 2008 and 83 Japanese yen purchased $1.00 U.S. in 2009, then:

the dollar depreciated against the yen.