Exchange-Rate Determination

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

A. $50 per pound
B. $1.00 per pound
C. $2.00 per pound
D. $8.00 per pound

A. appreciate by 8 percent against the yen
B. depreciate by 8 percent against the yen
C. remain at its existing exchange rate
None of the above

A. decrease the foreign demand for dollars causing the dollar to depreciate
B. decrease the foreign demand for dollars causing the dollar to appreciate
C. increase the foreign demand for dollars causing the dollar to depreciate
D. decrease the foreign demand for dollars causing the dollar to appreciate

A. 20 pounds
B. 40 pounds
C. 60 pounds
D. 80 pounds

A. domestic prices adjust slowly to shifts in demand
B. military spending during military conflicts
C. elasticities are smaller in the long run than the short run
D. elasticities are smaller in the short run than the long run

A. appreciate because of an increase supply of peso denominated assets
B. depreciate because of an increased supply of peso denominated assets
C. appreciated because of an increased demand for peso denominated assets
D. depreciated because of an increased demand for peso denominated assets

A. inflation effects exchange rates
B. international capital flows affect exchange rates
C. governments sometimes impose trade restrictions such as tariffs and quotas
D. not all products are internationally tradeable

A. the use of import tariffs and quotas by governments
B. the current account balance of each country
C. the relative growth rate of national output between countries
D. efforts of investors to balance their portfolios among financial assets denominated in different currencies

A. why exchange rates remain quite stable
B. why governments change their money supplies
C. long term exchange rate movements
D. short term exchange rate movements