1.The ¥/US$ exchange rate fell from ¥240/US$ to ¥102/dollar, while the US$/£ exchange rate fell from US$2.22/£ to US$1.62/£. As a result, A.the dollar appreciated relative to the yen, but depreciated relative to the pound. B.the dollar appreciated relative to both the yen and the pound. C.the dollar depreciated relative to the yen, but appreciated relative to the pound. D.the dollar depreciated relative to both the yen and the pound. 4.A rise in the real exchange rate is called A.a real depreciation. B.a real bargain. C.a real devaluation. D.a real appreciation. 3.The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called A.purchasing power parity. B.equity. C.efficiency. D.the tragedy of the commons. 4.Purchasing power parity does not hold in the short to medium run because A.exports don’t equal imports. B.exchange rates fluctuate too much. C.most business cycles are caused by shocks to aggregate demand. D.some goods aren’t internationally traded. 5.A depreciation of the dollar causes A.an increase in the prices of U.S. exports. B.an increase in the prices of U.S. imports. C.a decrease in U.S. exports. D.an increase in U.S. imports.
1.The ¥/US$ exchange rate fell from ¥240/US$ to ¥102/dollar, while the US$/£ exchange rate fell from US$2.22/£ to US$1.62/£. As a result,
A.the dollar appreciated relative to the yen, but
B.the dollar appreciated relative to both the yen and the pound.
C.the dollar depreciated relative to the yen, but appreciated relative to the pound.
D.the dollar depreciated relative to both the yen and the pound.
4.A rise in the real exchange rate is called
A.a real depreciation.
B.a real bargain.
C.a real devaluation.
D.a real appreciation.
3.The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called
A.purchasing power parity.
B.equity.
C.efficiency.
D.the tragedy of the commons.
4.Purchasing power parity does not hold in the short to medium run because
A.exports don’t equal imports.
B.exchange rates fluctuate too much.
C.most business cycles are caused by shocks to aggregate demand.
D.some goods aren’t internationally traded.
5.A depreciation of the dollar causes
A.an increase in the prices of U.S. exports.
B.an increase in the prices of U.S. imports.
C.a decrease in U.S. exports.
D.an increase in U.S. imports.
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