If the foreign price level rises, there is a(n)and net exportsSelect one:O a. appreciation of the nominal exchange rate; rise.O b. depreciation of the real exchange rate; rise.O c. depreciation of the real exchange rate; fall.O d. appreciation of the real exchange rate; rise.O e. depreciation of the nominal exchange rate; rise.Clear my choice

In the international market, any change in the price of a product of a country will affect the…

If the foreign price level rises, there is a(n) and net exports Select one: O a. appreciation of the nominal exchange rate; rise. O b. depreciation of the real exchange rate; rise. C. depreciation of the real exchange rate; fall. O d. appreciation of the real exchange rate; rise. O e. depreciation of the nominal exchange rate; rise. Clear my choice

If the foreign price level rises, there is a(n) and net exports Select one: O a. appreciation of the nominal exchange rate; rise. O b. depreciation of the real exchange rate; rise. C. depreciation of the real exchange rate; fall. O d. appreciation of the real exchange rate; rise. O e. depreciation of the nominal exchange rate; rise. Clear my choice

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 1 The theory of Purchasing Power Parity claims that O A. prices of similar goods in different countries should be the sam O B. nominal exchange rates should be equal to 1 O C. inflation rates should be the same across countries O D. prices of non-traded goods should be the same in different countries e
The approach to exchange rate determination argues that exchange rates are determined by the supply and demand for a wide variety of financial assets. O a. law of one price b. monetary Oc. asset market Od. balance of payments
QUESTION 3 sdenoted by GBP/USD and reflects the price of one Pound in Dollars. Search for the current GBP/USD exchange rate The U.S. Dollar-British Pound exchange rate and select a correct statement among the options below O A. Pound is a less expensive currency than Dollar O B. Pound is a more expensive currency than Dollar O C. Pound has always been less expensive than Dollar in the last 5 years O D. If GBP/USD falls, British goods would be more expensive for American consumers
A short-run increase in government spending causes the currency to and output to O appreciate; increase O appreciate; decrease O depreciate; increase O depreciate; decrease
Refer to Figure 32-2. If the real exchange rate is .6, then there is a .. Figure 32-2 1.8+Real Exchange Rate 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 50 100 150 200 250 300 350 400 Quantity of Dolars O a. shortage of 100 so the real exchange rate will fall. O b. surplus of 100 so the real exchange rate will fall. O c. surplus of 100 so the real exchange rate will rise. O d. shortage of 100 so the real exchange rate will rise.
In the short run, all of the following are disadvantages of a fixed exchange rate regime except: O A. macroeconomic shocks must be addressed with fiscal policy. O B. open market operations are overused. OC. they can lead to future exchange rate crises. O D. interest rates are constant. According to Robert Mundell, for countries to constitute an optimal currency area, such as adopting a common currency, they must have: O A. a different composition of industries. O B. high factor mobility. O C. similar per capita GDP. O D. all of the above.
If one Canadian dollar buys US$0.85, and one Euro buys US$1.20, then one Euro should buy O a. C$1.02 O b. C$1.41 O c. C$2 O d. C$1.64
In the foreign exchange market, an increase in the U.S. interest rate leads to in the exchange rate because the supply of dollars a fall; increases O b. no change; does not change Ос a rise; decreases O d. a rise; increases O . a fall; decreases
In the long run, with variable real exchange rates, if American goods become less attractive relative to European goods, the dollar will experience a real and a nominal | O appreciation; appreciation O appreciation; depreciation O depreciation; appreciation O depreciation; depreciation
You observe the following exchange rates Spot GBP/EUR exchange rate 1.120 € per £ 3 month GBP/EUR forward rate 1.115 Which of the following statements is likely to be true? Select one: O a. Neither of the other options O b. UK interest rates are lower than Eurozone interest rates O c. Speculators are expecting GBP to depreciate against EUR for the next year. d. UK interest rates arhigher than Eurozone interest rates. O e. Speculators are expecting GBP to appreciate against EUR for the next year.
QUESTION 2 In the long run, an increase in the nominal exchange rate is likely to lead to Note: Multiple answers are possible. O A. an increase in exports ) B. a decrease in exports C. an increase in imports D. a decrease in imports
Answer and Breif explantion