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ECO 213- Final Exam Questions And Answers Latest Updated
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ECO 213- Final Exam Questions And Answers Latest Updated
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ECO 213- Final Exam Questions And AnswersLatest Updated
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 ANS✔✔ 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 ANS✔✔ Unable to conduct monetary policy
If a country's currency is pegged to the dollar its exchange rate is ANS✔✔ fixed
A decrease in a fixed exchange rate from 1.75 per pound to 1.60 per pound is called an ANS✔✔
devaluation
You decide to work in London for the next 5 years, accumulate some savings, then move back to the US
ANS✔✔ 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. ANS✔✔
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 ANS✔✔ 1970s
Thailand's experience with pegging the baht to the dollar failed because the baht was _______________
relative to the dollar ANS✔✔ Overvalued, Undervalued
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, Figure 19-1. Which of the following would cause the change depicted in the figure above. ANS✔✔ US
productivity rises relative to European productivity
The ____________ system of currency exchange was set up in 1944. ANS✔✔ 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 ANS✔✔ 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 _________ ANS✔✔ 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 ANS✔✔ 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. ANS✔✔ Less than $.03/baht
Suppose the United States decides to go back on the gold standard. This should ANS✔✔ Decrease the
Federal Reserve's ability to pursue active monetary policy.
Pegging a country's exchange rate to the dollar can be advantageous if ANS✔✔ Investors believe the
dollar to be more stable than the domestic country's currency.
Suppose the GDP deflator in the United States is 125 and the GDP deflator in Japan is 100 ANS✔✔ The
exchange rate of yen per dollar will be less than 0.8.
2024
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