Indian rupee will appreciate against the Japanese yen when

real ir in India incr relative to Japan

If nothing else changes, an incr in US imports will tend to cause dollar to

depreciate b/c the world supply of dollars will rise

based on change in ir due to contractionary MP what happens to US $, imports exports

int'l value of USD incr, US imports incr & US exports decr

an incr in gov't budget deficit causes what change to int'l value of currency & trade deficit

value of currency appreciate; trade deficit becomes larger

Mexcio Central Bank incr MS but other countries don't, Mexico's infl rate, & peso int'l value

infl rate incr; int'l value of Peso depreciate

Which will lead to a depreciation of a nation's currency?

decr real ir compared to rest of world

If foreign financial investors no longer see country A as a safe haven, what will likely occur

Country A's currency will depreciate

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AP Macro Exam Review - Unit 5 (Spring 2019)

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FOREX, International Trade, Appreciation & Depreciation of Currency

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Questions 9

Answers

1
Indian rupee will appreciate against the Japanese yen when
India has a trade deficit with Japan
Japan's MS decr while India's MS incr
India's inflation rate exceeds Japan's
real ir in India incr relative to Japan
2
If nothing else changes, an incr in US imports will tend to cause dollar to
depreciate b/c the world supply of dollars will rise
appreciate b/c the world demand for dollars will rise
appreciate b/c the world supply of dollars will rise
depreciate b/c the world demand for dollars will rise
3
What is the balance on this current account?
-140
+70
-70
+140
4
based on change in ir due to contractionary MP what happens to US $, imports exports
int'l value of USD incr, US imports incr & US exports decr
int'l value of USD incr, US imports decr & US exports incr
int'l value of USD incr, US imports incr & US exports incr
int'l value of USD decr, US imports incr & US exports decr
5
decr in real ir is followed by incr in financial capital outflow. How does this affect Xn & AD
Xn decr, AD decr
Xn incr, AD no change
Xn incr, AD incr
Xn decr, AD no change
6
an incr in gov't budget deficit causes what change to int'l value of currency & trade deficit
value of currency depreciate; trade deficit becomes smaller
value of currency appreciate; trade deficit becomes smaller
value of currency appreciate; trade deficit becomes larger
value of currency depreciate; trade deficit becomes larger
7
Mexcio Central Bank incr MS but other countries don't, Mexico's infl rate, & peso int'l value
infl rate incr; int'l value of Peso depreciate
infl rate decr; int'l value of Peso appreciate
infl rate incr; int'l value of Peso appreciate
infl rate decr; int'l value of Peso depreciate
8
Which will lead to a depreciation of a nation's currency?
decr real ir compared to rest of world
incr demand for the nation's currency
higher req reserve ration than in the rest of the world
lower infl in the nation than in the rest of the world
9
If foreign financial investors no longer see country A as a safe haven, what will likely occur
Country A's currency will depreciate
Country A's financial acct will move toward surplus
Country A's current acct will move toward deficit
Country A's currency will appreciate

AP Macro Exam Review - Unit 5 (Spring 2019) Flashcards | StudBud