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 ?

Related Mcqs:

1. If the exchange rate between Swiss francs and British pounds is 5 francs per pound, then the number of pounds that can be obtained for 200 francs equals ?

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

2. Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ?

   A. America’s demand for Swiss merchandise rises
   B. America’s demand for Swiss merchandise falls
   C. Switzerland’s demand for American merchandise rises
   D. Switzerland’s demand for American merchandise falls

3. Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?

   A. the Canadian current account balance is in surplus
   B. the Swiss current account balance is in deficit
   C. the Canadian current account balance is in equilibrium
   D. the Swiss current account balance is in equilibrium

4. If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?

   A. 2.0
   B. 1.999
   C. 2.323
   D. 2.222

5. For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?

   A. the United States to Switzerland causing the dollar to depreciate
   B. the United States to Switzerland causing the dollar to appreciate
   C. Switzerland to the United States causing the franc to depreciate
   D. Switzerland to the United States causing the franc to appreciate

6. 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

7. In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?

   A. 200 pounds
   B. 400 pounds
   C. 600 pounds
   D. 800 pounds

8. 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

9. If British residents want more French francs to purchase more French cloths other things equal, then the equilibrium value of the pound against the French franc will ?

   A. rise
   B. fall
   C. not change
   D. fluctuate

10. 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