A. appreciates against foreign currencies
B. depreciates against foreign currencies
C. be officially revalued by the government
D. be officially devalued by the government
Related Mcqs:
- Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?
A. U.S exports tend to rise, and imports tend to fall
B. U.S imports tend to rise, and exports tend to fall
C. U.S foreign exchange reserves tend to rise
D. U.S foreign exchange reserves remain constant - 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 - 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 - 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 - Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
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 - 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 - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
A. The United States to Japan causing the dollar to depreciate
B. The United States to Japan causing the dollar to appreciate
C. The Japan to United States, causing the dollar to depreciate
D. The Japan to United States, causing the dollar to appreciate - 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 - If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall
B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise
C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.
D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise
