Site MapHelpFeedbackChapter Quiz
Chapter Quiz
(See related pages)

1
Use the following information to find the exchange rate between the British pound and the Canadian dollar:
AED 1 = 0.24 Canadian dollars
AED 1 = 0.12 British pounds
A)1 Canadian dollar = 0.5 British pounds
B)1 Canadian dollar = 2 British pounds
C)1 British pound = 0.5 Canadian dollars
D)1 British pound = 4 Canadian dollars
2
If the US dollar appreciates relative to the Euro, then, assuming it currently stands at $1= Euro0.75, the exchange rate is likely to go to:
A)$1 = Eur0.75
B)$1 = Eur0.85
C)$1 = Eur0.65
D)None of the above
3
When an exchange rate is set by the forces of demand and supply of the currency, it is called a:
A)Fixed exchange rate
B)Equilibrium exchange rate
C)Flexible exchange rate
D)None of the above
4
Which of the following factors results in an increase in the quantity of dollars supplied for British pounds?
A)Higher US real GDP
B)Appreciation of the dollar
C)Real interest rates on US assets being lower than those on British assets
D)Stronger preference for British goods
5
Demand for dollars by holders of the British pound will increase if:
A)The preference for US goods is weaker
B)Lower real GDP in Britain
C)Appreciation of the dollar
D)Real interest rates on US assets being higher than those of British assets
6
A tighter monetary policy results in:
A)An appreciation of that economy's currency
B)A decrease in interest rates
C)An increase in consumption and investment
D)An increase in net exports
7
Other things the same, if the exchange rate goes from 0.35 Kuwaiti dinar per dollar to 0.40 Kuwaiti dinar per dollar, the dollar has:
A)Appreciated and so buys more Kuwaiti goods
B)Depreciated and so buys more Kuwaiti goods
C)Appreciated and so buys less Kuwaiti goods
D)Depreciated and so buys less Kuwaiti goods
8
In the UAE, a three-kg bag of coffee costs about $10. Suppose the exchange rate is about 0.7 Euros per dollar, and that a three-kg bag of coffee in Belgium costs about 6 Euros. What is the real exchange rate?
A)6/7 bags of Belgian coffee per bag of UAE coffee
B)5/3 bags of Belgian coffee per bag of UAE coffee
C)7/6 bags of Belgian coffee per bag of UAE coffee
D)3/5 bags of Belgian coffee per bag of UAE coffee
9
Purchasing power parity is the theory that:
A)The price of an internationally traded commodity must be the same in all locations
B)Nominal exchange rates are determined as necessary for the law of one price to hold
C)The exchange rate is set by official government policy
D)Not all internationally traded goods and services are perfectly standardized commodities
10
If the US dollar's official value is greater than its equilibrium determined value, then the dollar is:
A)Undervalued
B)Properly valued
C)Overvalued
D)None of the above





To learn more about the book this website supports, please visit its Information Center.
(c)2013 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Frank: Principles of EconomicsOnline Learning Center

Home > Chapter 25 > Multiple Choice Quiz