Homework answers / question archive / University of the Cumberlands MBA 531 ASSIGNMENT EIGHTY CHAPTER 11 DEMAND/SUPPLY ANALYSIS OF TRADE, BUBBLES, AND MARKET-MAKING MULTIPLE CHOICE 1)When interest rates go up, people are a

University of the Cumberlands MBA 531 ASSIGNMENT EIGHTY CHAPTER 11 DEMAND/SUPPLY ANALYSIS OF TRADE, BUBBLES, AND MARKET-MAKING MULTIPLE CHOICE 1)When interest rates go up, people are a

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University of the Cumberlands

MBA 531

ASSIGNMENT EIGHTY

CHAPTER 11 DEMAND/SUPPLY ANALYSIS OF TRADE, BUBBLES, AND MARKET-MAKING

MULTIPLE CHOICE

1)When interest rates go up, people are

a.            More likely to borrow b. Less likely to borrow

c. Does not affect a person’s consumption

d. None of the above

2.            When interest rates fall, people are a. More likely to borrow

b.            Less likely to borrow

c.             Not likely to change borrowing patterns

d.            None of the above

3.            Holding other things constant, a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to            and the supply for Shilling to       .

a.            Increase; decrease

b.            Increase, increase c. Decrease; Increase

d. Decrease; Decrease

4.            Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy may cause the demand for the US dollar to         and the supply to             .

a.            Increase; decrease

b.            Increase, increase

c.             Decrease; Increase

d.            Decrease; Decrease

5.            Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy will cause the demand for the Canadian dollar to              and the supply to             .

a.            Increase; decrease

b.            Increase, increase c. Decrease; Increase

d. Decrease; Decrease

6.            The term to describe one currency in terms of another is called

a.            The interest rates

b.            The market price

c.             The inflation rate d. The exchange rate

7.            An individual in the US wants to buy a car from England which costs 12,000 pounds. If the exchange rate is 1 pound =

$1.75, how much would the car cost him in dollars? a. $21,000

b. $6,800

 

c. $12,000

d. Need more information

8.            The demand for dollars is downward sloping because when dollar appreciates,

a.            Foreigners demand more US goods and services b. Foreigners demand fewer US goods and services

c. Foreigners demand more dollars

d. Foreigners do not change their demand for US goods and services

9.            Holding other things constant, an appreciation of the US Dollar relative to the Chinese Yuan causes the demand for the Yuan to                and the supply for Yuan to           .

a.            Increase; decrease

b.            Increase, increase

c.             Decrease; Increase

d.            Decrease; Decrease

10.          Holding other things constant, an increase in the inflation rate in the US compared to China may cause the demand for dollar to      and the supply for dollar to         .

a.            Increase; decrease

b.            Increase, increase c. Decrease; Increase

d. Decrease; Decrease

11.          An individual in the US wants to buy office equipment from England which costs 2,000 pounds. If the exchange rate is 1pound=$1.9, how much will the office equipment cost him in dollar terms?

a. $2,000

b. $2,800 c. $3,800 d. $1052

12.          An individual in the England wants to buy office equipment from England which costs $2,000. If the exchange rate is 1pound=$1.9, how much will the office equipment cost him in pounds?

a.            2,000 pounds

b.            1,800 pounds

c.             3,800 pounds d. 1,053 pounds

13.          When interest rates go down, people are a. more likely to borrow

b.            less likely to borrow

c.             does not affect a person’s consumption

d.            None of the above

14.          The equilibrium price in the market for foreign currencies is called

a.            The price

b.            The market price c. The exchange rate

d. The going rate

 

15.          In the market for Canadian dollars measured in US dollars, the supply of US dollars is

a.            The supply of Canadian dollars b. The demand for Canadian Dollars

c. The demand for US dollars

d. None of the above

16.          In the market for Canadian dollars measured in US dollars, the demand for US dollars is a. The supply of Canadian dollars

b.            The demand for Canadian Dollars

c.             The supply of US dollars

d.            None of the above

17.          In the market for Canadian dollars measured in US dollars, the demand for Canadian dollars is

a.            The supply of Canadian dollars

b.            The demand for US Dollars c. The supply of US dollars

d. None of the above

18.          In the market for Canadian dollars measured in US dollars, the supply of Canadian dollars is

a.            The demand for Canadian dollars b. The demand for US Dollars

c. The supply of US dollars

d. None of the above

19.          In the market for Canadian dollars measured in US dollars, if the price of a Canadian dollar is 0.90 cents US, a US dollar is

a.            0.90 cents Canadian

b.            1 Canadian dollar

c.             1.11 Canadian dollars

d.            1.05 Canadian dollars

20.          In the market for Canadian dollars measured in US dollars, if the price of a US dollar is 1.10 Canadian dollars, a Canadian dollar is

a.            1.10 US dollars

b.            1 US dollar

c.             0.91 cents US

d.            0.99 cents US

21.          If a panic causes Indian depositors to withdraw their money from Japanese banks, it would cause the Japanese Yen to depreciate, since the supply of Yen has              

a.            Not changed

b.            Decreased c. Increased

d. None of the above

22.          If a panic causes Indian depositors to withdraw their money from Japanese banks, it would cause the Japanese Yen to

                , since the supply of Yen has increased

a.            Appreciate b. Depreciate

 

c. Not change in value

d. None of the above

23.          If a panic causes Indian depositors to withdraw their money from Japanese banks, it would cause the Japanese Yen to

                , since the supply of Yen has      

a.            Appreciate; Decrease

b.            Depreciate; Decrease

c.             Appreciate, Increase d. Depreciate; Increase

24.          In the case where interest rates are lower in Japan, which of the following is an example of a “carry trade”

a.            Increase borrowing in the US, convert to Yuan and invest in financial assets in Japan

b.            Increase borrowing in Japan and invest in Japan

c.             Increase borrowing in Japan, convert to Dollars and invest in the US

d.            Increase borrowing in the US and invest in the US

25.          In the case where interest rates are higher in Canada, which of the following is an example of a “carry trade”

a.            Increase borrowing in the US, convert to Canadian dollars and invest in Canada

b.            Increase borrowing in the US and invest in the US

c.             Increase borrowing in Canada, convert to dollars and invest in the US

d.            Increase borrowing in Canada and invest in Canada

26.          An American consumer wants to buy a Swiss watch. The exchange rate is 1USD=0.89 CHF(Swiss Francs). The watch costs 100 Swiss Francs. How much would it cost him in dollars?

a. $89

b. $112.36

c. $100

d. $160.82

27.          A Swiss consumer wants to buy an American car. The exchange rate is 1USD=0.89CHF (Swiss Francs). The car costs

$10,000. How much would the car cost him in Swiss Francs?

a.            12,000 Francs

b.            11,600Francs c. 8,900 Francs

d. 7,500 Francs

28.          A Swiss consumer wants to buy an American laptop. The exchange rate is 1USD=0.89CHF (Swiss Francs). The laptop costs $800. How much would the laptop cost him in Swiss Francs?

a.            1200 Francs

b.            1160Francs

c.             890Francs d. 712 Francs

29.          If Chinese consumers want to buy US goods, they will

a.            Buy Yuan and sell US Dollars b. Sell Yuan and buy US Dollars

c. Neither buy nor sell Yuan

d. Neither buy nor sell dollars

 

30.          If US consumers want to buy Chinese goods, they will a. Buy Yuan and sell US Dollars

b.            Sell Yuan and buy US Dollars

c.             Neither buy nor sell Yuan

d.            Neither buy nor sell dollars

31.          For foreigners, the intersection of the demand for US dollars and the supply of US dollar is known as the

a.            Inflation rate b. Exchange rate

c. Price

d. Quantity

32.          Holding other things constant, decreases in the price level in the US will a. Cause the dollar to appreciate

b.            Cause the dollar to depreciate

c.             Cause no change in dollar value

d.            None of the above

33.          Holding other things constant, if the US dollar appreciates, it makes the US exports a. Less attractive to foreigners

b.            More attractive to foreigners

c.             Neither more nor less attractive to foreigners

d.            None of the above

34.          Holding other things constant, if the US dollar depreciates, it makes the US exports

a.            Less attractive to foreigners b. More attractive to foreigners

c. Neither more nor less attractive to foreigners

d. None of the above

35.          Holding other things constant, if the Japanese Yen, depreciates, it makes the Japanese products

a.            Less attractive to US customers

b.            More attractive to US customers             

c.             Neither more nor less attractive to US customers

d.            None of the above

36.          Holding other things constant, if the Japanese Yen, appreciates, it makes the Japanese products a. Less attractive to US customers

b.            More attractive to US customers

c.             Neither more nor less attractive to US customers

d.            None of the above

37.          Holding other things constant, if the Japanese Yen, depreciates, it makes the imports to Japan a. More expensive for Japanese customer

b.            Less expensive for Japanese customers

c.             Neither more or less expensive for importers

d.            None of the above

 

38.          Holding other things constant, if the Japanese Yen, appreciates, it makes the imports to Japan

a.            More expensive for Japanese customer b. Less expensive for Japanese customers

c. Neither more or less expensive for importers

d. None of the above

39.          If the Canadian dollar appreciates, holding other things constant, it makes Canadian imports

a.            More expensive for Canadian customers b. Less expensive for Canadian customers

c. Neither more or less expensive for importers

d. None of the above

40.          If the Canadian dollar depreciates, holding other things constant, it makes Canadian imports a. More expensive for Canadian customers

b.            Less expensive for Canadian customers

c.             Neither more or less expensive for importers

d.            None of the above