The less foreigners demand U.S. products:
a. the more of their currencies they will supply in exchange for U.S. dollars.
b. the more of their currencies they will demand in exchange for U.S. dollars.
c. the less of their currencies they will supply in exchange for U.S. dollars.
d. the less of their currencies they will demand in exchange for U.S. dollars.
Question 2A major macroeconomic goal of nearly every society is:
a. maintaining stability of prices.
b. maintaining high levels of employment.
c. achieving high rates of economic growth.
d. all of the above.
Question 3Demand for U.S. dollars by speculators is likely to increase if the dollar is expected to depreciate in the near future.
a. True
b. False
Indicate whether the statement is true or false
Question 4Under a system of flexible exchange rates, a decrease in the demand for a country's currency on the foreign exchange market will:
a. cause the country's currency to depreciate in value.
b. cause the country's currency to appreciate in value.
c. make the country's goods more expensive to foreigners.
d. make foreign goods less expensive to the country's citizens.
Question 5The construction of a price index is complicated by several factors, including changes in the quality of goods and services over time, the introduction of new products, and the disappearance of old, outmoded products.
a. True
b. False
Indicate whether the statement is true or false
Question 6Because of their greediness, speculators are considered bad for exchange-rate markets.
a. True
b. False
Indicate whether the statement is true or false
Question 7If the Federal Reserve was to buy U.S. dollars on the foreign exchange market, a likely result will be:
a. a rightward shift in the dollar supply curve.
b. at least a temporary decline in the exchange value of the U.S. dollar.
c. at least a temporary increase in the exchange value of the U.S. dollar.
d. both (a) and (b)
Question 8The CPI measures the average level of prices of all final goods and services produced in the economy.
a. True
b. False
Indicate whether the statement is true or false
Question 9An increase in the demand for rubles causes the ruble to appreciate.
a. True
b. False
Indicate whether the statement is true or false
Question 10As the number of British pounds that exchange for a dollar rises on foreign currency markets:
a. the British will have an incentive to import fewer U.S. goods.
b. the British will find it easier to export goods to the United States.
c. the British will find U.S. goods to be more expensive in their stores.
d. all of the above will be true.
Question 11Economists believe that the Consumer Price Index tends to overstate the actual rate of inflation.
a. True
b. False
Indicate whether the statement is true or false
Question 12Fixed exchange rates serve as a constraint on inflationary government policies.
a. True
b. False
Indicate whether the statement is true or false
Question 13If the dollar appreciates relative to the yen, we would expect:
a. that the Japanese trade surplus with the United States would increase.
b. that Japanese imports from the United States would decrease.
c. that Japanese exports to the United States would decrease.
d. both (a) and (b)
Question 14The economy reaches full employment when the unemployment rate equals zero.
a. True
b. False
Indicate whether the statement is true or false
Question 15A downward-sloping demand curve for Korean won in terms of Canadian dollars indicates that the higher the dollar price of Korean won, the more won will be demanded.
a. True
b. False
Indicate whether the statement is true or false
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