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ECO 213- Final Exam with complete solutions 2024_2025.
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ECO 213- Final Exam with complete solutions 2024_2025.
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ECO 213- Final Exam with completesolutions 2024/2025
If a country's currency is determined only by the demand and supply for that
country's currency, the country is said to have a - ANSWER-floating exchange
rate.
Countries that use the euro as their currency face similar concerns as countries
did during the years of the gold standard in that each are - ANSWER-Unable to
conduct monetary policy
If a country's currency is pegged to the dollar its exchange rate is - ANSWER-
fixed
A decrease in a fixed exchange rate from 1.75 per pound to 1.60 per pound is
called an - ANSWER-devaluation
You decide to work in London for the next 5 years, accumulate some savings,
then move back to the US - ANSWER-You should be discouraged as the declining
US preference for British goods should decrease the value of the pound to the
dollar and decrease the value of your savings when converted to dollars
During the Chinese experience with pegging the yuan to the dollar, the yuan was
undervalued. - ANSWER-There was a surplus of dollars on the market that the
Chinese Government had to purchase to maintain the peg.
, Americans, other than jewelers or rare coin collectors, were not allowed to own
gold from the early 1930s until the - ANSWER-1970s
Thailand's experience with pegging the baht to the dollar failed because the baht
was _______________ relative to the dollar - ANSWER-Overvalued, Undervalued
Figure 19-1. Which of the following would cause the change depicted in the figure
above. - ANSWER-US productivity rises relative to European productivity
The ____________ system of currency exchange was set up in 1944. - ANSWER-
Bretton Woods
Figure 19-10. Under the Bretton Woods System of exchange rates, if the par
exchange rate was $2 per pound in the figure above, and equilibrium persisted at
$3 - ANSWER-Increased the price of British exports to the United States
If the US government places a tariffs on imports form the countries that have
been accused of deliberately undervalued their currencies, the price of these
imports will _________ - ANSWER-rise, fall
China began pegging its currency, the yuan, to the dollar in 1994. Because the
yuan was ______ at the pegged exchange rate, the level of Chinese exports
remained _________ than they would have been od the exchange rate was
allowed to float freely - ANSWER-undervalued, higher
Figure 19-3. At what level should the Thai government peg its currency to the
dollar to make Thai exports cheaper to the United States. - ANSWER-Less than
$.03/baht
Suppose the United States decides to go back on the gold standard. This should -
ANSWER-Decrease the Federal Reserve's ability to pursue active monetary
policy.
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