5. Test questions (4% each) 1) A currency depreciation on the foreign exchange market will: (a) encourage imports to the

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5 Test Questions 4 Each 1 A Currency Depreciation On The Foreign Exchange Market Will A Encourage Imports To The 1 (55.76 KiB) Viewed 50 times

5. Test questions (4% each) 1) A currency depreciation on the foreign exchange market will: (a) encourage imports to the country whose currency has depreciated; (b) discourage imports to the country whose currency has depreciated; (c) discourage exports from the country whose currency has depreciated; (d) encourage foreign travel by the citizens of the country whose currency has depreciated. 2) All of the following would add to the demand for US dollars except: (a) long-term capital inflows into the United States; (b) foreign travel by US citizens; (c) exports of commodities from the United States; (d) travel by foreigners on United States airlines. 3) An increase in US interest rates can be expected to: (a) negatively affect US exporters; (b) encourage investment spending by US firms; (c) lower the exchange rate of the dollar; (d) cause an outflow of foreign capital from the United States. 4) Japan and the United States are engaged in a system of flexible exchange rates. If less people in Japan decide to purchase American cars, what effect will this have on the graph shown below which depicts the market for yen? yenis Supply of yen Demand for yen Ootyen (c) Supply will increase. Show on the graph! (a) Demand will decrease. (b) Demand will increase. (d) Supply will decrease. 5) Under the Bretton Woods system, the US government bought and sold gold (with other governments) at the price per ounce of: (a) $35; (b) $70; (c) $350; (d) $700.