What would cause the movement from D1 to D2?

Higher interest rates in America

If the demand for British pounds in the United States rises, then:

The U.S. dollar price of the British pound increases.

If the dollar depreciates relative to the South Korean Won, the Won:

Will appreciate relative to the dollar.

Which of the following will generate a demand for country X’s currency in the foreign exchange market?

The desire of foreigners to buy stocks and bonds of firms in country X

The current account in the nation’s balance of payments includes:

Goods and Services exported and imported

A country's Balance of Payments will experience a surplus when:

Credits in the current account exceed debits.

A country with a trade deficit will experience which of the following regarding its currency in the FOREX?

Depreciation due to increased demand for foreign currencies.

Travel by U.S. citizens within Europe creates a:

Demand for euros and a supply of dollars.

A deficit on the current account:

Normally causes a surplus on the capital and financial account.

If the dollar price of rupee rises, then:

The dollar depreciates relative to the rupee

A nation's currency depreciates when:

There is an increase in the supply of its currency in the FOREX

A rightward shift of a nation’s long-run aggregate supply curve is equivalent to:

an outward shift of the nation’s production possibilities curve.

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AP Econ Unit 7&8

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Questions 15

Answers

1
What would cause the movement from D1 to D2?
Higher interest rates in Europe
Higher interest rates in America
Low interest rates in America
European goods become more popular in America
2
If the demand for British pounds in the United States rises, then:
The U.S. dollar appreciates.
The supply of dollars decreases.
The U.S. dollar price of the British pound increases.
The pound depreciates.
3
If the dollar depreciates relative to the South Korean Won, the Won:
Will be less expensive to Americans.
May either appreciate or depreciate relative to the dollar.
Will depreciate relative to the dollar.
Will appreciate relative to the dollar.
4
Which of the following will generate a demand for country X’s currency in the foreign exchange market?
The imports of country X
The desire of foreigners to buy stocks and bonds of firms in country X
Charitable contributions by country X’s to citizens of developing nations
Travel by citizens of country X in other countries
5
The current account in the nation’s balance of payments includes:
Financial Assets
Goods and Services exported and imported
Capital
The current production expectation of that economy
6
A country's Balance of Payments will experience a surplus when:
The financial account has a deficit.
Imports exceed exports.
Credits in the current account exceed debits.
Capital outflows exceed capital inflows.
7
A country with a trade deficit will experience which of the following regarding its currency in the FOREX?
Depreciation due to increased demand for foreign currencies.
Appreciation due to increased demand for its currency.
Depreciation due to increased supply of its currency.
Appreciation due to increased supply of foreign currencies.
8
Travel by U.S. citizens within Europe creates a:
Both a supply of dollars and a demand for dollars.
Demand for dollars and a supply of euros.
Demand for euros and a supply of dollars.
Supply of euros and a demand for dollars.
9
When a Icelandic investor buys stock in Wilson Sports, which of the following balance of payments accounts is affected?
Financial Account
Foreign Exchange Account
Balance of trade account
Current Account
10
Which of the following would call for outpayments from the United States?
Foreigners purchase assets in the United States
Foreign tourists spend money in the United States
U.S. exports computer software
U.S. purchases assets abroad
11
If the exchange rate between the US dollar and the British pound changes from 1 USD = 0.75 GBP to 1 USD = 0.80 GBP,shows
Depreciation of the GBP.
Depreciation of the USD.
Appreciation of the USD.
Appreciation of the GBP.
12
A deficit on the current account:
Has no relationship to the capital and financial account.
Normally causes a surplus on the capital and financial account.
Means that a nation is making international transfers.
Normally causes a deficit on the capital and financial account.
13
If the dollar price of rupee rises, then:
The rupee price of dollars also rises.
The rupee depreciates relative to the dollar.
The dollar will buy fewer U.S. goods.
The dollar depreciates relative to the rupee
14
A nation's currency depreciates when:
Its interest rates rise
Its inflation rates are lower than its trading partners.
There is an increase in the supply of its currency in the FOREX
Its exports increase while imports decrease.
15
A rightward shift of a nation’s long-run aggregate supply curve is equivalent to:
a downward shift of the nation’s aggregate expenditures curve
an outward shift of the nation’s production possibilities curve.
a rightward shift of the nation’s aggregate demand curve.
a rightward shift of the nation’s investment demand curve.

AP Econ Unit 7&8 Flashcards | StudBud