instituting exchange controls to ration Ed Swiss francs to U.S. importers who wa
ID: 1204504 • Letter: I
Question
instituting exchange controls to ration Ed Swiss francs to U.S. importers who wantEc francs.
using international monetary reserves to cover the Ec shortage of Swiss francs.
shifting the S curve to the right through the use of domestic expansionary policies.
using international monetary reserves to cover the cd shortage of Swiss francs.
7. Evidence of a chronic balance of payments deficit is:
an excess of exports over imports.
an increase in the international value of the nation's currency.
a decline in amount of the nation's currency held by other nations.
diminishing reserves of foreign currencies.
8. If in a system of fixed exchange rates the dollar price of euros is above the market equilibrium level:
the U.S. government will have to ration euros to U.S. importers.
there will be a shortage of euros.
there will be a surplus of euros.
gold will flow from the United States to Europe.
9. Which of the following combinations is plausible, as it relates to a nation's balance of payments?
Current account = $+10 billion; capital account = $+40 billion; financial account = $+50 billion.
Current account = $-50 billion; capital account = $+20 billion; financial account = $+30 billion.
Current account = $+30 billion; capital account = $-20 billion; financial account = $-50 billion.
Current account = $+40 billion; capital account = $+20 billion; financial account = $-50 billion.
10. The following are hypothetical exchange rates: $1 = 140 yen; 1 Swiss franc = $.10. We can conclude that:
1 yen = 14 Swiss francs.
1 Swiss franc = 14 yen.
1 yen = 280 Swiss francs.
1 Swiss franc = 28 yen.
11. The U.S. supply of Japanese yen is:
downsloping because a lower dollar price of yen means U.S. goods are cheaper to the Japanese.
downsloping because a higher dollar price of yen means U.S. goods are cheaper to the Japanese.
upsloping because a lower dollar price of yen means U.S. goods are cheaper to the Japanese.
upsloping because a higher dollar price of yen means U.S. goods are cheaper to the Japanese.
12. In the U.S. balance of payments, foreign purchases of assets in the United States are a:
foreign currency outflow.
foreign currency inflow.
current account item.
debit, or outpayment.
6 and 8.
1, 2, 4, 7, and 9.
1, 3, 4, 5, 7, and 9.
1, 2, 3, and 4.
14. Which of the following would call for outpayments from the United States?
The United States exports computer software.
The United States purchases assets abroad.
Foreign tourists spend money in the United States.
Foreigners purchase assets in the United States.
15. Suppose the balance on the current account is +$100 billion and the balance on the capital account is -$1 billion. The balance on the financial account is:
-$101 billion.
-$99 billion.
-$100 billion.
+$101 billion.
$30 billion surplus.
$20 billion deficit.
$10 billion deficit.
$30 billion deficit.
supplied at each dollar price to fall and the dollar to depreciate relative to the libra.
demanded at each dollar price to rise and the dollar to depreciate relative to the libra.
demanded at each dollar price to fall and the dollar to appreciate relative to the libra.
supplied at each dollar price to rise and the dollar to appreciate relative to the libra.
18. The following table contains hypothetical data for the 2012 U.S. balance of payments. Answer the question on the basis of this information. All figures are in billions of dollars.
$40 billion surplus.
$25 billion deficit.
$25 billion surplus.
$30 billion deficit.
Explanation / Answer
6. using international monetary reserves to cover the cd shortage of Swiss francs.
7. diminishing reserves of foreign currencies.
8. there will be a surplus of euros.
9. Current account = $-50 billion; capital account = $+20 billion; financial account = $+30 billion.
10. 1 Swiss franc = 14 yen.
11. downsloping because a higher dollar price of yen means U.S. goods are cheaper to the Japanese.
12. foreign currency inflow.
13. 1, 3, 4, 5, 7, and 9.
14. The United States purchases assets abroad.
15.
16. $30 billion deficit.
17. supplied at each dollar price to rise and the dollar to appreciate relative to the libra.
18. $25 billion deficit.
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