A. the rate of inflation in the United States
B. the number of dollars printed by the U.S government
C. the international demand and supply for dollars
D. the monetary value of gold held at Fort Knox, Kentucky
Related Mcqs:
- During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
A. flows of foreign investment into the United States
B. rising price inflation in the United States
C. a substantial decrease in U.S imports
D. a substantial increase in U.S exports - Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?
A. anticipate the dollar to depreciate against the euro
B. anticipate the dollar to appreciate against the euro
C. anticipate the dollar’s exchange rate against the euro to remain constant
D. have no anticipation concerning future movements in the dollar/euro exchange rate - The high foreign exchange value of the U.S dollar in the early 1980s can best be explained by ?
A. additional investment funds made available from overseas
B. lack of investor confidence in U.S fiscal policy
C. market expectations of rising inflation in the United States
D. American tourists overseas finding costs increasing - Suppose that U.S dollar depreciates 70 percent against the yen yet Japanese export prices to Americans did not decrease by the full extent of the dollar depreciation. This is best explained by ?
A. partial currency pass through
B. complete currency pass through
C. partial J curve effect
D. complete J curve effect - 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 - Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
A. 0.67 pesos = $1
B. 0.8 pesos = $1
C. 1.25 pesos = $1
D. 1.67 pesos = $1 - Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?
A. 2 francs per dollar
B. 1 franc per dollar
C. $2 per franc
D. $3 per franc - The real effective exchange rate for the U.S dollar ?
A. reflects only the influences of merchandise or real trade on the dollar’s exchange value
B. reflects only transactions in the currency futures market
C. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?
D. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners unadjusted for inflation? - If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
A. $0.0909
B. $0.1002
C. $0.2826
D. $1.1024 - 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
