货币银行学 章节题库 ch20

ECON320Chapter 20 Practice Test Professor C. James Hueng1)When the value of the British pound changes from $1.25 to $1.50, the pound has ________ and the U.S. dollarhas ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated2)When the value of the British pound changes from $1.50 to $1.25, then the pound has ________ and the U.S.dollar has ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated3)When the value of the dollar changes from £0.5 to £0.75, then the British pound has ________ and the U.S. dollarhas ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated4)When the value of the dollar changes from £0.75 to £0.5, then the British pound has ________ and the U.S. dollarhas ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated5)When the exchange rate for the Mexican peso changes from 9 pesos to the U.S. dollar to 10 pesos to the U.S.dollar, then the Mexican peso has ________ and the U.S. dollar has ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated6)When the exchange rate for the Mexican peso changes from 10 pesos to the U.S dollar to 9 pesos to the U.S.dollar, then the Mexican peso has ________ and the U.S. dollar has ________.A)appreciated; appreciated B)depreciated; appreciatedC)appreciated; depreciated D)depreciated; depreciated7)On April 7, 2006, one U.S. dollar traded on the foreign exchange market for about 0.83 euros. Therefore, oneeuro would have purchased about ________ U.S. dollars.A)0.83B)1.00C)1.20D)1.838)On April 7, 2006, one U.S. dollar traded on the foreign exchange market for about 44.5 Indian rupees. Thus, oneIndian rupee would have purchased about ________ U.S. dollars.A)0.02B)1.20C)7.00D)44.59)On April 7, 2006, one U.S. dollar traded on the foreign exchange market for about 1.30 Swiss francs. Therefore,one Swiss franc would have purchased about ________ U.S. dollars.A)0.30B)0.77C)1.30D)3.1010)On April 7, 2006, one U.S. dollar traded on the foreign exchange market for about 2.86 Romanian new lei.Therefore, one Romanian new lei would have purchased about ________ U.S. dollars.A)0.35B)1.86C)2.86D)3.3511)If the U.S. dollar appreciates from 1.25 Swiss franc per U.S. dollar to 1.5 francs per dollar, then the francdepreciates from ________ U.S. dollars per franc to ________ U.S. dollars per franc.A)0.80; 0.67B)0.67; 0.80C)0.50; 0.33D)0.33; 0.5012)If the British pound appreciates from $0.50 per pound to $0.75 per pound, the U.S. dollar depreciates from________ per dollar to ________ per dollar.A)£2; £2.5B)£2; £1.33C)£2; £1.5D)£2; £1.2513)If the Japanese yen appreciates from $0.01 per yen to $0.02 per yen, the U.S. dollar depreciates from ________per dollar to ________ per dollar.A)100¥; 50¥B)10¥; 5¥C)5¥; 10¥D)50¥; 100¥14)If the dollar appreciates from 1.5 Brazilian reals per dollar to 2.0 reals per dollar, the real depreciates from________ per real to ________ per real.A)$0.67; $0.50B)$0.33; $0.50C)$0.75; $0.50D)$0.50; $0.67E)$0.50; $0.7515)When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per pound, then, holdingeverything else constant, the pound has ________ and ________ expensive.A)appreciated; British cars sold in the United States become moreB)appreciated; British cars sold in the United States become lessC)depreciated; American wheat sold in Britain becomes moreD)depreciated; American wheat sold in Britain becomes less16)If the dollar depreciates relative to the Swiss francA)Swiss chocolate will become cheaper in the United States.B)American computers will become more expensive in Switzerland.C)Swiss chocolate will become more expensive in the United States.D)Swiss computers will become cheaper in the United States.17)Everything else held constant, when a country's currency appreciates, the country's goods abroad become________ expensive and foreign goods in that country become ________ expensive.A)more; less B)more; more C)less; less D)less; more18)Everything else held constant, when a country's currency depreciates, its goods abroad become ________expensive while foreign goods in that country become ________ expensive.A)more; less B)more; more C)less; less D)less; more19)According to the law of one price, if the price of Colombian coffee is 100 Colombian pesos per pound and theprice of Brazilian coffee is 4 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian reals is:A)40 pesos per real.B)100 pesos per real.C)25 pesos per real.D)0.4 pesos per real.20)The ________ states that exchange rates between any two currencies will adjust to reflect changes in the pricelevels of the two countries.A)theory of purchasing power parity B)law of one priceC)theory of money neutrality D)quantity theory of money21)The theory of PPP suggests that if one country's price level rises relative to another's, its currency shouldA)depreciate.B)appreciate.C)float.D)do none of the above.22)The theory of PPP suggests that if one country's price level falls relative to another's, its currency shouldA)depreciate.B)appreciate.C)float.D)do none of the above.23)The theory of PPP suggests that if one country's price level rises relative to another's, its currency shouldA)depreciate in the long run.B)appreciate in the long run.C)depreciate in the short run.D)appreciate in the short run.24)The theory of PPP suggests that if one country's price level falls relative to another's, its currency shouldA)depreciate in the long run.B)appreciate in the long run.C)appreciate in the short run.D)depreciate in the short run.25)The theory of purchasing power parity cannot fully explain exchange rate movements becauseA)all goods are identical even if produced in different countries.B)monetary policy differs across countries.C)some goods are not traded between countries.D)fiscal policy differs across countries.26)The theory of purchasing power parity states that exchange rates between any two currencies will adjust toreflect changes inA)the trade balances of the two countries.B)the current account balances of the two countries.C)fiscal policies of the two countries.D)the price levels of the two countries.27)In the long run, a rise in a country's price level (relative to the foreign price level) causes its currency to________, while a fall in the country's relative price level causes its currency to ________.A)appreciate; appreciate B)appreciate; depreciateC)depreciate; appreciate D)depreciate; depreciate28)If the 2005 inflation rate in Canada is 4 percent, and the inflation rate in Mexico is 2 percent, then the theory ofpurchasing power parity predicts that, during 2005, the value of the Canadian dollar in terms of Mexican pesos willA)rise by 6 percent.B)rise by 2 percent.C)fall by 6 percent.D)fall by 2 percent.29)True or False? Assume that the following are the predicted inflation rates in these countries for the year: 2% forthe United States, 3% for Canada; 4% for Mexico, and 5% for Brazil. According to the purchasing power parity and everything else held constant, the Brazilian real will depreciate against the U.S. dollar.A)True.B)False.30)True or False? Assume that the following are the predicted inflation rates in these countries for the year: 2% forthe United States, 3% for Canada; 4% for Mexico, and 5% for Brazil. According to the purchasing power parity and everything else held constant, the Mexican peso will depreciate against the Brazilian real.A)True.B)False.31)True or False? Assume that the following are the predicted inflation rates in these countries for the year: 2% forthe United States, 3% for Canada; 4% for Mexico, and 5% for Brazil. According to the purchasing power parity and everything else held constant, the Canadian dollar will appreciate against the Mexican peso.A)True.B)False.32)Assume that the following are the predicted inflation rates in these countries for the year: 2% for the UnitedStates, 3% for Canada; 4% for Mexico, and 5% for Brazil. According to the purchasing power parity and everything else held constant, which of the following would we expect to happen?A)The Brazilian real will depreciate against the U.S. dollar.B)The Mexican peso will depreciate against the Brazilian real.C)The Canadian dollar will depreciate against the Mexican peso.D)The U.S. dollar will depreciate against the Canadian dollar.33)According to the purchasing power parity theory, a rise in the United States price level of 5 percent, and a risein the Mexican price level of 6 percent causeA)the dollar to appreciate 1 percent relative to the peso.B)the dollar to depreciate 1 percent relative to the peso.C)the dollar to depreciate 5 percent relative to the peso.D)the dollar to appreciate 5 percent relative to the peso.34)Higher tariffs and quotas cause a country's currency to ________ in the ________ run, everything else heldconstant.A)depreciate; short B)appreciate; short C)depreciate; long D)appreciate; long35)Lower tariffs and quotas cause a country's currency to ________ in the ________ run, everything else heldconstant.A)depreciate; short B)appreciate; short C)depreciate; long D)appreciate; long36)Anything that increases the demand for foreign goods relative to domestic goods tends to ________ thedomestic currency because domestic goods will only continue to sell well if the value of the domestic currency is ________, everything else held constant.A)depreciate; lower B)depreciate; higher C)appreciate; lower D)appreciate; higher37)Everything else held constant, increased demand for a country's ________ causes its currency to appreciate inthe long run, while increased demand for ________ causes its currency to depreciate.A)imports; imports B)imports; exports C)exports; imports D)exports; exports38)Everything else held constant, increased demand for a country's exports causes its currency to ________ in thelong run, while increased demand for imports causes its currency to ________A)appreciate; appreciate B)appreciate; depreciateC)depreciate; appreciate D)depreciate; depreciate39)Everything else held constant, if a factor increases the demand for ________ goods relative to ________ goods,the domestic currency will appreciate.A)foreign; domestic B)foreign; foreignC)domestic; domestic D)domestic; foreign40)Everything else held constant, if a factor decreases the demand for ________ goods relative to ________ goods,the domestic currency will depreciate.A)foreign; domestic B)foreign; foreignC)domestic; domestic D)domestic; foreign41)An increase in productivity in a country will cause its currency to ________ because it can produce goods at a________ price, everything else held constant.A)depreciate; lower B)appreciate; lower C)depreciate; higher D)appreciate; higher42)If, in retaliation for "unfair" trade practices, Congress imposes a 30 percent tariff on Japanese DVD recorders,but at the same time, U.S. demand for Japanese goods increases, then, in the long run, ________, everything else held constantA)the Japanese yen should appreciate relative to the U.S. dollarB)the Japanese yen should depreciate relative to the U.S. dollarC)there is no effect on the Japanese yen relative to the U.S. dollarD)the Japanese yen could appreciate, depreciate or remain constant relative to the U.S. dollar43)If the U.S. Congress imposes a quota on imports of Japanese cars due to claims of "unfair" trade practices, andJapanese demand for American exports increases at the same time, then, in the long run ________, everything else held constant.A)the Japanese yen will appreciate relative to the U.S. dollarB)the Japanese yen will depreciate relative to the U.S. dollarC)the Japanese yen will either appreciate, depreciate or remain constant against the U.S. dollarD)there will be no effect on the Japanese yen relative to the U.S. dollar44)If the inflation rate in the United States is higher than that in Mexico and productivity is growing at a slowerrate in the United States than in Mexico, then, in the long run, ________, everything else held constant.A)the Mexican peso will appreciate relative to the U.S. dollarB)the Mexican peso will depreciate relative to the U.S. dollarC)the Mexican peso will either appreciate, depreciate, or remain constant relative to the U.S. dollarD)there will be no effect on the Mexican peso relative to the U.S. dollar45)If the Brazilian demand for American exports rises at the same time that U.S. productivity rises relative toBrazilian productivity, then, in the long run, ________, everything else held constant.A)the Brazilian real will appreciate relative to the U.S. dollarB)the Brazilian real will depreciate relative to the U.S. dollarC)the Brazilian real will either appreciate, depreciate, or remain constant relative to the U.S. dollarD)there is no effect on the Brazilian real relative to the U.S. dollar46)The theory of asset demand suggests that the most important factor affecting the demand for domestic andforeign assets isA)the level of trade and capital flows.B)the expected return on these assets relative to one another.C)the liquidity of these assets relative to one another.D)the riskiness of these assets relative to one another.47)The theory of asset demand suggests that the most important factor affecting the demand for domestic andforeign assets is the ________ on these assets relative to one another.A)interest rate B)risk C)expected return D)liquidity48)The condition that states that the domestic interest rate equals the foreign interest rate minus the expectedappreciation of the domestic currency is calledA)the purchasing power parity condition.B)the interest parity condition.C)money neutrality.D)the theory of foreign capital mobility.49)As the relative expected return on dollar assets increases, foreigners will want to hold more ________ assets andless ________ assets, everything else held constant.A)foreign; foreign B)foreign; dollar C)dollar; foreign D)dollar; dollar50)When Americans or foreigners expect the return on ________ assets to be high relative to the return on ________assets, there is a higher demand for dollar assets and a correspondingly lower demand for foreign assets.A)dollar; dollar B)dollar; foreign C)foreign; dollar D)foreign; foreign51)When Americans or foreigners expect the return on ________ assets to be high relative to the return on ________assets, there is a ________ demand for dollar assets, everything else held constant.A)dollar; foreign; constant B)dollar; foreign; higherC)foreign; dollar; higher D)foreign; dollar; constant52)When Americans or foreigners expect the return on dollar assets to be high relative to the return on foreignassets, there is a ________ demand for dollar assets and a correspondingly ________ demand for foreign assets.A)higher; higher B)higher; lower C)lower; higher D)lower; lower53)If the interest rate is 7 percent on euro-denominated assets and 5 percent on dollar-denominated assets, and ifthe dollar is expected to appreciate at a 4 percent rate, for Francois the Frenchman the expected rate of return on dollar-denominated assets isA)11 percent.B)9 percent.C)5 percent.D)3 percent.E)1 percent.54)If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets,and if the euro is expected to appreciate at a 4 percent rate, for Manuel the Mexican the expected rate of return on euro-denominated assets isA)11 percent.B)13 percent.C)17 percent.D)19 percent.55)If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets,and if the euro is expected to appreciate at a 4 percent rate, for Francois the Frenchman the expected rate of return on peso-denominated assets isA)11 percent.B)15 percent.C)17 percent.D)19 percent.56)With a 10 percent interest rate on dollar deposits, and an expected appreciation of 7 percent over the comingyear, the expected return on dollar deposits in terms of the foreign currency isA)3 percent.B)10 percent.C)13.5 percent.D)17 percent.57)With a 10 percent interest rate on dollar deposits, and an expected appreciation of 7 percent over the comingyear, the expected return on dollar deposits in terms of the dollar isA)3 percent.B)10 percent.C)13.5 percent.D)17 percent.58)In a world with few impediments to capital mobility, the domestic interest rate equals the sum of the foreigninterest rate and the expected depreciation of the domestic currency, a situation known as theA)interest parity condition.B)purchasing power parity condition.C)exchange rate parity condition.D)foreign asset parity condition.59)According to the interest parity condition, if the domestic interest rate is 12 percent and the foreign interest rateis 10 percent, then the expected ________ of the foreign currency must be ________ percent.A)appreciation; 4B)appreciation; 2C)depreciation; 2D)depreciation; 460)According to the interest parity condition, if the domestic interest rate is 10 percent and the foreign interest rateis 12 percent, then the expected ________ of the foreign currency must be ________ percent.A)appreciation; 4B)appreciation; 2C)depreciation; 2D)depreciation; 4C)decrease; appreciate D)decrease; depreciate62)A decrease in the domestic interest rate causes the demand for domestic assets to ________ and the domesticcurrency to ________, everything else held constant.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciate63)________ in the domestic interest rate causes the demand for domestic assets to increase and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate64)________ in the domestic interest rate causes the demand for domestic assets to decrease and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate65)________ in the domestic interest rate causes the demand for domestic assets to shift to the left and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate66)________ in the domestic interest rate causes the demand for domestic assets to ________ and the domesticcurrency to appreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease67)________ in the domestic interest rate causes the demand for domestic assets to ________ and the domesticcurrency to depreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease68)Suppose that the Federal Reserve enacts expansionary policy. Everything else held constant, this will cause thedemand for U.S. assets to ________ and the U.S. dollar to ________.A)increase; appreciate B)decrease; appreciateC)increase; depreciate D)decrease; depreciate69)Suppose that the Federal Reserve conducts an open market sale. Everything else held constant, this will causethe demand for U.S. assets to ________ and the U.S. dollar will ________.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciate70)An increase in the foreign interest rate causes the demand for domestic assets to ________ and the domesticcurrency to ________, everything else held constant.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciateC)decrease; appreciate D)decrease; depreciate72)________ in the foreign interest rate causes the demand for domestic assets to increase and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate73)________ in the foreign interest rate causes the demand for domestic assets to decrease and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate74)________ in the foreign interest rate causes the demand for domestic assets to shift to the left and the domesticcurrency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate75)________ in the foreign interest rate causes the demand for domestic assets to ________ and the domesticcurrency to appreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease76)________ in the foreign interest rate causes the demand for domestic assets to ________ and the domesticcurrency to depreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease77)Suppose that the European Central Bank enacts expansionary policy. Everything else held constant, this willcause the demand for U.S. assets to ________ and the U.S. dollar to ________.A)increase; appreciate B)decrease; appreciateC)increase; depreciate D)decrease; depreciate78)Suppose that the European Central Bank conducts a main refinancing sale. Everything else held constant, thiswould cause the demand for U.S. assets to ________ and the U.S. dollar will ________.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciate79)An increase in the expected future domestic exchange rate causes the demand for domestic assets to ________and the domestic currency to ________, everything else held constant.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciate80)A decrease in the expected future domestic exchange rate causes the demand for domestic assets to ________and the domestic currency to ________, everything else held constant.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciate81)________ in the expected future domestic exchange rate causes the demand for domestic assets to increase andthe domestic currency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate82)________ in the expected future domestic exchange rate causes the demand for domestic assets to shift to theright and the domestic currency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate83)________ in the expected future domestic exchange rate causes the demand for domestic assets to decrease andthe domestic currency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate84)________ in the expected future domestic exchange rate causes the demand for domestic assets to shift to the leftand the domestic currency to ________, everything else held constant.A)An increase; appreciate B)An increase; depreciateC)A decrease; appreciate D)A decrease; depreciate85)________ in the expected future domestic exchange rate causes the demand for domestic assets to ________ andthe domestic currency to appreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease86)________ in the expected future domestic exchange rate causes the demand for domestic assets to ________ andthe domestic currency to depreciate, everything else held constant.A)An increase; increase B)An increase; decreaseC)A decrease; increase D)A decrease; decrease87)Suppose that the latest Consumer Price Index (CPI) release shows a higher inflation rate in the U.S. than wasexpected. Everything else held constant, the release of the CPI report would immediately cause the demand for U.S. assets to ________ and the U.S. dollar would ________.A)increase; appreciate B)increase; depreciateC)decrease; appreciate D)decrease; depreciateAnswer Key Testname: CH201)C2)B3)B4)C5)B6)C7)C8)A9)B10)A11)A12)B13)A14)A15)C16)C17)A18)D19)C20)A21)A22)B23)A24)B25)C26)D27)C28)D29)A30)B31)A32)A33)A34)D35)C36)A37)C38)B39)D40)D41)B42)D43)B44)A45)B46)B47)C48)B49)C50)B51)BAnswer Key Testname: CH2052)B53)B54)C55)A56)D57)B58)A59)B60)C61)A62)D63)A64)D65)D66)A67)D68)D69)A70)D71)A72)C73)B74)B75)C76)B77)A78)D79)A80)D81)A82)A83)D84)D85)A86)D87)D。