A. should increase the dollar value of exports
B. should not have any effect on the dollar value of U.S imports
C. must increase the balance of trade
D. All of the above
Related Mcqs:
- What is called that bank which regularly accepts foreign currency-denominated deposits and makes foreign currency-denominated deposits and makes foreign currency loans ?
A. Eurobank
B. Foreign bank
C. International Bank
D. Multinational Bank - 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 - In the Px = export price index, Pm = import price index, Qx = export quantity index,and Qm = import quantity index. Developing countries tend to maintain that their commodity term of trade have declined over the long run suggesting that _________ has declined?
A. Px/Pm
B. Pm/Px
C. (Pm/Px)Qm
D. (Px/Pm)Qx - Even though explicit contracts may lead to layoffs during recessions explicit contracts may still be efficient because such contracts ?
A. minimize negotiation costs
B. minimize unemployment effects
C. guarantee that only the least productive workers will be laid off.
D. will equitable spread the layoffs among junior and senior workers - Micheal Roemer’s three-sector model shows that growth in the booming export sector I- reduces the price of foreign exchange II- retards other sectors’ growth by reducing incentives to export other commodities III- reduces incentives to replace domestic goods for imports IV- raises factor and input prices for non-booming sectors ?
A. I and III only
B. II and III only
C. I, II and III only
D. I, II , III only IV - Suppose that the United Kingdom devalues the pound if both exports and imports are written in terms of pounds then the United Kingdom balance of trade during a currency contract period ?
A. improves
B. worsens
C. is unaffected
D. falls for a while before increasing - Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a ?
A. trade surplus in the short run
B. trade surplus in the long run
C. trade deficit in the short run
D. trade deficit in the long run - The booming of North Seas’ gas export revenues in the 1970s that appreciated the guilder, making industrial export more costly in foreign currencies and increasing foreign competition and unemployment is known as ?
A. Trade deficit
B. Blind river disease
C. Dutch disease
D. Economic turmoil - With fixed exchange rates and no private currency flows, when the central bank buys domestic currency the domestic money supply is ?
A. increased
B. unaffected
C. reduced
D. None of these - Complete currency pass through arises when a 10 percent depreciation in the value of the dollar causes U.S?
A. import prices to fall by 10 percent
B. import prices to rise by 10 percent
C. export prices to rise by 10 percent
D. export prices to fall by 10 percent
