QUESTION 15 Which of the following will cause the Australian dollar (AUD) to appreciate against the US dollar (USD)? A decrease in the Australian interest rate. A decreasing Australian price level. A decrease in US demand for Australian coal. Expected depreciation of the Australian dollar against the US dollar amongst currency traders. An increase in Australian demand for US electronics.

QUESTION 15 Which of the following will cause the Australian dollar (AUD) to appreciate against the US dollar (USD)? A decrease in the Australian interest rate. A decreasing Australian price level. A decrease in US demand for Australian coal. Expected depreciation of the Australian dollar against the US dollar amongst currency traders. An increase in Australian demand for US electronics.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter11: Foreign Exchange, Trade, And Bubbles

Section: Chapter Questions

Problem 6MC

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Suppose that yesterday, the U.S. dollar was trading on the foreign exchange market at 0.75 eurosper U.S. dollar and today the U.S. dollar is trading at 0.80 euros per U.S. dollar. Which of the twocurrencies (the U.S. dollar or the euro) has appreciated and which has depreciated today?b) Suppose that the exchange rate for the Mexican peso fell from 15 pesos per U.S. dollar to 10 pesosper U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan tobuy in the foreign exchange market?c) Suppose that the exchange rate rose from 80 yen per U.S. dollar to 90 yen per U.S. dollar. What isthe effect of this change on the quantity of U.S. dollars that people plan to sell in the foreignexchange market?
What is an appreciation in the exchange rate of a currency? Outline two (2) positive effects of an appreciation in the value of the Australian Dollar. How is the level of unemployment in Australia likely to be affected by an appreciation in the value of the Australian Dollar.
An appreciation of the dollar against all currencies in the foreign exchange market would result in all of the following, except: a) a decrease in the dollar prices paid by U.S. importers. b) an increase in the cost of vacations in Florida for Japanese tourists. c) foreign holidays for U.S. residents to be less expensive. d) an increase in the foreign currency prices paid for U.S. exports. e) an increase in the demand for U.S. exports.
If the exchange rate between the US Dollar ($) and the Euro (E) goes from being $5/E to $6/E, we say that the US Dollar has __________ relative to the Euro. a) depreciated b) stagnated c) appreciated d) arbitraged
The expression that represents the Australian dollar price in foreign currency is: 01/E EP* ○ EP/P* EP* |P EP
As the price level decreases, the cost of borrowing money will (remain the same/increase/decrease) , causing the quantity of output demanded to (rise/increase/fall/remain the same) . This phenomenon is known as the (exchange rate/interest rate/wealth) effect. Additionally, as the price level decreases, the impact on the domestic interest rate will cause the real value of the dollar to (rise/decrease/falll) in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore (rise/increase/fall/remain the same) , and the number of foreign products purchased by domestic consumers and firms (imports) will (rise/decrease/fall/remain the same) . Net exports will therefore (rise/increase/fall/remain the same) , causing the quantity of domestic output demanded to (fall/increase/remain the same/rise) . This phenomenon is known as the (exchange rate/interest rate/wealth) effect.
If the exchange rate between the US Dollar ($) and the Euro (E) goes from being $7/E to $6/E, we say that the US Dollar has __________ relative to the Euro. a) appreciated b) arbitraged c) stagnated d) depreciated
A decrease in the German demand for American-made goods will Group of answer choices all of these increase the demand for dollars in the foreign exchange market. not change the demand for dollars in the foreign exchange market. decrease the demand for dollars in the foreign exchange market.
9) Which of the following can lead to an increase in the demand for Japanese yen compared to the U.S. dollar? a) an increase in the relative price of Japanese-made goods b) an increase in the interest rate in Japan relative to the U.S. rate c) a decrease in the amount of yen bought by the U.S. government d) a decrease in the demand for goods made in Japan 10) Which of the following statements is NOT true? a) If a country's exports exceed its imports, then there is a trade surplus. b) If the balance of trade is positive, then the balance of payments is also positive. c) If a country's balance of trade is positive, then its exports exceed its imports. d) A country's balance of trade includes trade in both goods and services.
Which of the following affects the demand for U.S. dollars in the foreign exchange market? Multiple Choice domestic demand for U.S. stocks domestic demand for U.S.-made cars foreign demand for U.S. exports European demand for euros
A decrease in Chinese demand for U.S. dollars over the past year has reduced the market equilibrium exchange rate of the dollar from 10 yuan per dollar to 6.5 yuan per dollar. Other things being equal, which of the following is a likely consequence of this kind of change in the exchange rate of the dollar? a. A higher price of exported U.S. products in Chinese for those paying in yuan, which leads to a deficit in the net export. b. A lower price for imported Chinese products in the U.S. for those paying in dollars, which leads to a surplus in the net export. c. A higher price for imported Chinese products in the U.S. for those paying in dollars, which leads to a deficit in the net export. d. Both (a) and (c)
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