Tutorial Question for FOREX Market (Student Copy).doc

Tutorial Question for FOREX Market (Student Copy).docTutorial Question1] The number of units of foreign currency that can be acquired with one unit of domestic moneyis called the ________________.AExchange rate. BBalance of payments. CInternational finance. DNone of the aboveRM3.10 = USD12] If US dollar appreciates relative to the yen, which of the following is true?A The dollar’s purchasing power in terms of yen has increasedB The dollar’s purchasing power in terms of yen has decreasedC A dollar previously worth 100 yen, would now be worth less than 100 yenD both b and cOrigin USD$1 = Yen$1Appreciation in USD meansUSD$1 = Yen$1.43] If the US dollar depreciates relative to the yen, which of the following is true?A The dollar’s purchasing power in terms of yen has increasedB The dollar’s purchasing power in terms of yen has decreasedC A dollar previously worth 100 yen, would now be worth more than 100 yenD both b and cOrigin USD$1 = Yen$1Depreciation in USD meansUSD$1 = Yen$0.94] Adepreciation of US dollar will _____________.A Lower the foreign currency price of U.S. goods in foreign markets.B Increase the foreign currency price of U.S. goods in foreign markets.CLower the dollar price of foreign goods in the United StatesDBoth b and c5] The supply of dollar-denominated funds (USD)comes from the ___________.AForeign demand for American-made goods, services, and securities. BAmerican demand for American-made goods, services, and securities. CAmerican demand for foreign-made goods, services, and securities DForeign demand for foreign-made goods, services, and securities.6] The demand for dollar-denominated funds (USD) comes from the_______________.A Foreign demand for American-made goods, services, and securities.B American demand for American-made goods, services, and securities.C American demand for foreign-made goods, services, and securitiesD Foreign demand for foreign-made goods, services, and securities.7] If an American-made handbag cost USD$129.00 and the dollarappreciated , foreign price of the handbag would tend to _____________.A Remain the same.B Increase.C Decrease.D None of the aboveOrigin USD$1 = RM 3.10Appreciation of USD means USD$1 = RM3.20MalaysiaSingaporeThailandMalaysiaSingaporeThailand8] As US dollar appreciates, prices in terms of US dollar of foreign goods (Toyota sold in New York) __________ .A.Decrease.B.Increase.C.Remain the same.D.Increase, holding all foreign exchange constant.Origin USD$1 = Yen$1After appreciation of USDIt means USD$1 = Yen$1.1Import price in US USD$0.909 = Yen$1Implication = Appreciation of USD, Foreign products will be cheaper = import increaseDepreciation expensive = export increase9] When the US dollar depreciates, which of the following generally occurs? Exports to Malaysia increase. Imports from Malaysia decrease. Imports from Malaysia increase.D.Both a and bOrigin USD$1 = RM3.10Depreciation in USD meansUSD$1 = RM?10] The record of transactions between the United States and its trading partners in the rest of the world over a particular period of time is called the _________.A.Balance of goods and services.B.Balance of capital account.C.Balance of current account.D.Balance of payments.11] The difference between merchandise exports and imports is called the _________.A.Trade deficit.B.Trade surplus.C.Trade balance.D.Capital account surplus.12] If US dollar appreciates, foreigners will tend to respond by __________.A.Decreasing the quantity demanded of American-made goods.B.Increasing the quantity demanded of American-made goods.C.Decreasing the demand of American-made goods.D.Increasing the demand of American-made goods.11] The balance of goods and services plus net unilateral transfers is called the ____________.A.Trade balance.B.Balance on capital account.C.Balance on current account.D.Balance of payments.12] When U.S. merchandise imports are greater than exports, the United States is running a ______.A.Trade deficit.B.Trade surplus.C.Trade balance.D.Capital account surplus.13] When US dollar appreciates relative to foreign currencies, __________.A. A trade surplus resultsB.U.S. exports and imports become more expensive.C.U.S. exports become more expensive and U.S. imports become cheaper.D.United States experiences a balance of payments deficit.。