A. exchange rates to be insensitive to the differential rates of inflation between countries
B. the currencies of relatively high-inflation countries to depreciate
C. the currencies of relatively high inflation countries to appreciate
D. the currencies of relatively low inflation countries to depreciate
Related Mcqs:
- Under floating exchange rates, expectations of higher interest rates are likely to cause an ____ of the exchange rate?
A. depreciation
B. appreciation
C. fall
D. devaluation - Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
D. decrease in the demand for foreign currency and increase in the supply of foreign currency and a appreciation in the dollar - Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar - If one country, with floating exchange rates, has higher inflation than its competitors we would expect its exchange rate to ?
A. appreciate
B. depreciate
C. revalue
D. be in short supply - The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
A. price feedback theory
B. trade feedback theory
C. J-curve theory
D. purchasing power parity theory - Under a system of floating exchange rates the pound would depreciate in value if there occurs ?
A. Price inflation in the United States
B. an increase in U.S real income
C. a decrease in the British money supply
D. falling interest rates in Britain - Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?
A. pegged of fixed exchange rates
B. adjustable pegged exchange rates
C. managed floating exchange rates
D. free floating exchange rates - Under managed floating exchange rates if the rate of inflation in the United States is less than the rate of inflation of its trading partners the dollar will likely ?
A. appreciates against foreign currencies
B. depreciates against foreign currencies
C. be officially revalued by the government
D. be officially devalued by the government - Given a system of floating exchange rates rising income in the United States would trigger a (an) ?
A. increasing in the demand for imports and an increasing in the demand for foreign currency
B. increase in the demand for imports and decrease in the demand for foreign currency
C. decrease in the demand for imports and an increase in the demand for foreign currency
D. decrease in the demand for imports and a decrease in the demand for foreign currency - If Japan runs current account deficit and exchange rates are floating?
A. Japanese exports become more expensive to foreign buyers
B. Japanese exports become less expensive for foreign buyers
C. Japanese imports become less expensive for German buyers
D. Japanese imports become more prestigious to German buyers
