definitions
The nominal exchange rate is
is unadjusted for inflation
When a country's currency depreciates:
foreigners find this country's goods to be relatively cheaper
CA + CFA =
0
When the United States gives foreign aid to developing nations in Africa, which of the following balance of payments account is affected?
current account
How many inches are in a mile?
63,360
The exchange rate is the:
relative price of currencies between countries
When a currency appreciates
that currency buys more foreign goods than it did previously.
What is the relationship between exchange rate and quantity demanded?
inverse
If Japanese buyers demand more US dollars, then
The dollar will appreciate, the yen will depreciate, the US balance of payments on current account will fall, and the US balance of payments on financial accounts will rise
What is the currency of Argentina?
Argentine peso
When does a trade surplus occur?
when the value of goods and services a country imports is less than the value of goods and services it exports.
If a country has a current account deficit, it must have a:
financial account surplus
List one determinants of exchange rate:
1. taste
2. change in relative incomes
3. changes in relative PL
4. changes in relative IR
When Russia hosted the 2014 Winter Olympic games, many global tourists visited Russia and these visitors exchanged their home currencies for Russian rubles. Back home, this would have caused
imported goods from Russia to become more expensive
What is 5^2 x 7?
175
What is a trade balance?
the value of a nation's exports minus the value of its imports; also called net exports
A country has a financial account surplus if the balance on the:
financial account is negative
Why do we have exchange rates?
in order for any transaction to occur between different countries, exchange rate is needed
(to import goods, buy bonds of another country)
Suppose that the US and European Union are the only trading partners in the world. If the US lowers import restrictions from euro, it would:
the demand for euros increase, appreciating the euro
In the periodic table of elements what does Pb stand for?
Lead
What is a country's Balance of Payments Account (BOP)?
summary of country's transactions with other countries (exports/imports, interest payments, and foreign investments)
If the US dollar changes frm $1 = 200Y to $1 = 100Y then
the dollar has depreciated relative to the yen
Each country needs to be paid
in their own currency
In the foreign exchange market, an increase in the rate of return available in the European Union, all other things equal, will shift the ______ and the euro will ______.
demand curve for the euro to the right; appreciate
In what land locked state is it illegal to hunt whales?
Utah