29. suppose that the current exchange rate between the dollar and pesos is $1=10

Question

29. suppose that the current exchange rate between the dollar and pesos is $1=10pesos. if the exchange rate changes to $1=8 pesos, which of the following is true:

a. the dollar appreciated and US exports become cheaper

b.the dollar depreciates and US exports become cheaper

c.the peso depreciates and imports from mexico become cheaper

d.the peso appreciates and imports from mexico become cheaper

30. in July 2011, $1 was worth 45 indian rupees and in july of 2012, $1 was worth 55 indian rupees. we can there for conclude that:

a. the value of the US dollar has fluctuated

b.the US dollar has depreciated

c.the indian rupee appreciated

d.the indian rupee depreciated

31. an important problem with the gold standard was that:

a. a countryy did not have control of its domestic monetary policy

b.one country could easily manipulate the system to its advantage and the disadvantage of other countries

c.exchange rates tended to flucuate a great deal, making it difficult for businesses to make long run plans

d.it was too complicated and restricted business activity

32. under the Bretton Woods agreement, the goal of the IMF was to:

a.lend to countries experiencing balance of payment deficits

b.help less developed countries advertise their goods in the developed countries

c.provide over sight to the functioning of central banks in the member countries

d.finanace international transactions in gold

33. foreign exchange risk is:

a. the possibility that changes in the value of a nation's currency will result in variation in the market value of assets

b.active management of a floating exchange rate on the part of a country's government

c.an exchange rate arrangement in which a country pegs the value of it's currency to the echange value

d.a financial strategy that reduces the change of suffering losses arising from foreign exchange risk

18.one way that tariffs differ from quotas is that:

a. tarrifs are applied only on raw materials

b.tarrifs produce no revenues but set limits on the imported items

c.tariffs produce revenues for the importing country's government

d.quotas produce revenues for the exporting country's government

Explanation / Answer

29. the peso appreciates and imports from mexico become cheaper

30. the indian rupee appreciated

32. provide over sight to the functioning of central banks in the member countries

33. a financial strategy that reduces the change of suffering losses arising from foreign exchange risk

18. quotas produce revenues for the exporting country's government

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