ECO 213- Final Exam Questions and Correct Answers | Latest Update
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Course
ECO 213
Institution
ECO 213
If a country's currency is determined only by the demand and supply for that country's
currency, the country is said to have a
floating exchange rate.
Countries that use the euro as their currency face similar concerns as countries did during the
years of the gold standard in that each ar...
Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
ECO 213- Final Exam Questions and
Correct Answers | Latest Update
If a country's currency is determined only by the demand and supply for that country's
currency, the country is said to have a
floating exchange rate.
Countries that use the euro as their currency face similar concerns as countries did during the
years of the gold standard in that each are
Unable to conduct monetary policy
If a country's currency is pegged to the dollar its exchange rate is
fixed
A decrease in a fixed exchange rate from 1.75 per pound to 1.60 per pound is called an
devaluation
You decide to work in London for the next 5 years, accumulate some savings, then move back
to the US
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
You should be discouraged as the declining US preference for British
goods should decrease the value of the pound to the dollar and decrease
the value of your savings when converted to dollars
During the Chinese experience with pegging the yuan to the dollar, the yuan was
undervalued.
There was a surplus of dollars on the market that the Chinese Government
had to purchase to maintain the peg.
Americans, other than jewelers or rare coin collectors, were not allowed to own gold from the
early 1930s until the
1970s
Thailand's experience with pegging the baht to the dollar failed because the baht was
_______________ relative to the dollar
Overvalued, Undervalued
Figure 19-1. Which of the following would cause the change depicted in the figure above.
US productivity rises relative to European productivity
The ____________ system of currency exchange was set up in 1944.
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
Bretton Woods
Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate
was $2 per pound in the figure above, and equilibrium persisted at $3
Increased the price of British exports to the United States
If the US government places a tariffs on imports form the countries that have been accused of
deliberately undervalued their currencies, the price of these imports will _________
rise, fall
China began pegging its currency, the yuan, to the dollar in 1994. Because the yuan was
______ at the pegged exchange rate, the level of Chinese exports remained _________ than
they would have been od the exchange rate was allowed to float freely
undervalued, higher
Figure 19-3. At what level should the Thai government peg its currency to the dollar to make
Thai exports cheaper to the United States.
Less than $.03/baht
Suppose the United States decides to go back on the gold standard. This should
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