Section A: Multiple Choice Questions Q5. If the exchange rate rises: a. Exports will rise and imports will fall b. Exports will rise and imports will rise c. Exports will fall and imports will fall d. Exports will fall and imports will rise
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- If the foreign interest rate increases and U.S. interest rates also increases_______?Group of answer choices 1The exchange rate increases (the US $ appreciates). 2The exchange rate is certainly unaffected and remains the same. 3The exchange rate decreases (the US $ depreciates). 4The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates).If the demand for the goods that we export increases______?Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate increases (the US $ appreciates). 4The exchange rate decreases (the US $ depreciates).Draw a demand for dollars curve. Label it D. Draw a supply of dollars curve. Label it S. Draw a point at the equilibrium quantity and equilibrium exchange rate. Exchange rate (U.S. cents per Canadian dollar) 120- 110- Draw an arrow between the D and S curves that indicates a price at which there is a surplus of dollars. Label it. 100- 90- 80- 70- 60- 50- 20 50 70 30 40 60 80 Quantity (billions of Canadian dollars per day) >>> Draw only the objects specified in the question. Selected: Delete Clear none
- If the foreign interest rate increases________?Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate decreases (the US $ depreciates). 4The exchange rate increases (the US $ appreciates).The graph shows the supply curve of Canadian dollars. Draw a new supply curve that shows the effect of a rise in the expected future exchange rate. Label it. A change in the expected future exchange rate changes the supply of Canadian dollars________, and a change in Canadian demand for imports changes the supply of Canadian dollars O A. today; today B. in the future; today C. today; in the future D. in the future; in the future 120 MacBook Pro 110 100- 90- 80- 70- Exchange rate (Canadian cents per Canadian dollar) Click the graph, choose a tool in the palette and follow the instructions to create your graph. So 70 80 90 100 10 20 30 40 50 60 Quantity (billions of Canadian dollars per day) >>> Draw only the objects specified in the question.A high value of a currency would result in which of the following?Select one:a. Greater competitiveness of exportsb. More exportsc. Increased demand of the higher value currencyd. Increased demand of exports of higher currency value products e. More ImportsIf
- If there is a decrease in the desire of Americans to purchase goods and services from other countries and put money in foreign banks and businesses then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would increase and the US dollar would appreciate. B. The equilibrium quantity of foreign currency would decrease and the US dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the US dollar would depreciate.Why would a country want to impose an exchange rate ceiling? a. A strong currency encourages imports and can be used to fight inflation. b. A strong currency stimulates an economy. c. A weak currency encourages imports and can be used to fight inflation. d. A weak currency will encourage exports and stimulate the economy.If there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.
- What is the level of exports after the policy is put in place? Question 16Answer a. q3q4 b. q3q5 c. q2q5 d. q3q2 P P P2 P1 P3 P4 S ES D ED* P S* D* 0 q1 q2 q3 q4 q5 Q 0 q6 q7 48 Q O q9 q10 911 912 Q Domestic Market Trade Region Foreign Market Large Country with Loan Deficiency PaymentsIf the productivity or the productivity of the workforce decreases_______?Group of answer choices 1The exchange rate decreases (the US $ depreciates). 2The exchange rate is unaffected. 3The exchange rate increases (the US $ appreciates). 4The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates).If foreigners want to invest more in the American economy______?Group of answer choices 1The exchange rate increases (the US $ appreciates). 2The exchange rate is unaffected. 3The exchange rate decreases (the US $ depreciates). 4The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates).
