货币银行学习题 章节 (10)

Understanding Foreign

Exchange

D1 Interpretive

1.The more we pay for a euro, the __________________ European goods are to us and the

__________________ European assets are to us.

A)cheaper; cheaper

B)cheaper; more expensive

C)more expensive; cheaper

D)more expensive; more expensive

Answer: D

D1 Factual

2.Currencies of different countries are traded in the so-called

A)money market.

B)foreign exchange market.

C)international reserve.

D)currency conversion market.

Answer: B

D1 Factual

3.Generally speaking, exchange rates are determined by

A)supply and demand.

B)the International Monetary Fund.

C)interest rates.

D)differences in money growth rates.

Answer: A

D2 Interpretive

4.Importing a foreign good increases the __________________ the foreign currency and

increases the __________________ the currency of the importing country in the foreign

exchange market.

A)demand for; demand for

B)demand for; supply of

C)supply of; demand for

D)supply of; supply of

Answer: B

113114 Ritter/Silber/Udell Money, Banking, and Financial Markets, Eleventh Edition

D2 Interpretive

5.A(n) __________________ in exports by the U.S. results in a(n) __________________

in the supply of foreign exchange.

A)increase; increase

B)decrease; increase

C)increase; decrease

D)None of the above

Answer: A

D3 Interpretive

6. A __________________ in the balance of payments means that we are paying out more

money abroad than we are taking in, resulting in a(n) __________________ of foreign

exchange value relative to the dollar.

A)deficit; depreciation

B)surplus; appreciation

C)surplus; depreciation

D)deficit; appreciation

Answer: D

D3 Applied

7.The U.S. has a balance of payments surplus with Europe. We would therefore expect the

supply of euros to be __________________ the demand for euros. Consequently, the euro

should __________________.

A)less than; appreciate

B)greater than; depreciate

C)less than; depreciate

D)greater than; appreciate

Answer: D

D1 Applied

8.If the Japanese buy more Cadillacs, they __________________ more yen and

__________________ more dollars in the foreign exchange market.

A)supply; supply

B)supply; demand

C)demand; supply

D)demand; demand

Answer: B

D2 Interpretive

9.With a deficit in our balance of payments, there is an excess __________________ dollars

in the foreign exchange market, causing the dollar to __________________.

A)demand for; appreciate

B)demand for; depreciate

C)supply of; appreciate

D)supply of; depreciate

Answer: DChapter 10 Understanding Foreign Exchange 115

D2 Interpretive

10.With a surplus in our balance of payments, there is an excess __________________

dollars in the foreign exchange market, causing the dollar to __________________.

A)demand for; appreciate

B)demand for; depreciate

C)supply of; appreciate

D)supply of; depreciate

Answer: A

D2 Interpretive

11. A deficit in our balance of payments causes the dollar to __________________, which

causes the deficit to __________________.

A)appreciate; increase

B)appreciate; decrease

C)depreciate; increase

D)depreciate; decrease

Answer: D

D2 Interpretive

12. A surplus in our balance of payments causes the dollar to __________________, which

causes the surplus to __________________.

A)appreciate; increase

B)appreciate; decrease

C)depreciate; increase

D)depreciate; decrease

Answer: B

D2 Interpretive

13. A __________________ shift in the demand curve for a foreign currency causes the

foreign currency to __________________.

A)rightward; appreciate

B)leftward; appreciate

C)rightward; depreciate

D)None of the above

Answer: A

D2 Interpretive

14.Which of the following statements is incorrect?

A)Whatever causes U.S. residents to buy more foreign goods shifts the demand curve for

the foreign currency to the right.

B)Whatever causes U.S. residents to buy fewer foreign goods shifts the supply curve of the

foreign currency to the left.

C)Whatever causes foreigners to buy fewer foreign goods shifts the supply curve of the

foreign currency to the left.

D)Whatever causes foreigners to buy more foreign goods shifts the supply curve of the

foreign currency to the right.

Answer: B116 Ritter/Silber/Udell Money, Banking, and Financial Markets, Eleventh Edition

D1 Factual

15.Which of the following factors does not affect the long-run supply and demand conditions

of foreign currencies?

A)Relative inflation rates

B)Relative productivity levels

C)Tastes for domestic versus foreign goods

D)All of the above affect the long-run supply and demand conditions of foreign

currencies.

Answer: D

D1 Applied

16.If the price of a Swiss franc is $0.60, the price of a dollar is __________________ Swiss

francs.

A)0.40

B) 1.40

C) 1.67

D) 6.0

Answer: C

D1 Applied

17.If the price of $1 is 1.67 Swiss francs, the price of a Swiss franc is

A)$0.33

B)$1.67

C)$2.00

D)$0.67

Answer: D

D2 Applied

18.The equilibrium price for a British pound is $1.60. At a price of $1.75 per British pound,

there would be excess __________________ the dollar and the dollar would

.

A)supply of; appreciate

B)supply of; depreciate

C)demand for; appreciate

D)demand for; depreciate

Answer: C

D2 Applied

19.The equilibrium price for a British pound is $1.60. At a price of $1.55 per British pound,

there would be excess __________________ the dollar and the dollar would

.

A)supply of; appreciate

B)supply of; depreciate

C)demand for; appreciate

D)demand for; depreciate

Answer: BChapter 10 Understanding Foreign Exchange 117

D2 Interpretive

20.We would expect the euro to appreciate when there is a __________________ shift in the

euro demand curve or a __________________ shift in the euro supply curve.

A)rightward; rightward

B)rightward; leftward

C)leftward; rightward

D)leftward; leftward

Answer: B

D2 Interpretive

21.We would expect the euro to depreciate when there is a __________________ shift in the

euro demand curve or a __________________ shift in the euro supply curve.

A)rightward; rightward

B)rightward; leftward

C)leftward; rightward

D)leftward; leftward

Answer: C

D2 Interpretive

22.Anything that causes the U.S. to buy more foreign goods shifts the foreign currency

__________________ curve to the __________________.

A)demand; right

B)demand; left

C)supply; right

D)supply; left

Answer: A

D1 Interpretive

23.Anything that causes the U.S. to buy fewer foreign goods shifts the foreign currency

__________________ curve to the __________________.

A)demand; right

B)demand; left

C)supply; right

D)supply; left

Answer: B

D1 Interpretive

24.If prices rise in Japan, everything else constant, the dollar __________________ against

the yen and the yen __________________ against the dollar.

A)appreciates; appreciates

B)appreciates; depreciates

C)depreciates; appreciates

D)depreciates; depreciates

Answer: B118 Ritter/Silber/Udell Money, Banking, and Financial Markets, Eleventh Edition

D1 Interpretive

25.If prices rise in the U.S., everything else constant, the dollar __________________

against the yen and the yen __________________ against the dollar.

A)appreciates; appreciates

B)appreciates; depreciates

C)depreciates; appreciates

D)depreciates; depreciates

Answer: C

D1 Interpretive

26. A rise in foreign productivity tends to __________________ foreign prices and causes the

dollar to __________________ relative to the foreign currency.

A)raise; appreciate

B)raise; depreciate

C)lower; appreciate

D)lower; depreciate

Answer: D

D1 Interpretive

27. A rise in domestic productivity tends to __________________ domestic prices and causes

the dollar to __________________ relative to foreign currencies.

A)raise; appreciate

B)raise; depreciate

C)lower; appreciate

D)lower; depreciate

Answer: C

D1 Applied

28.South Africa is a major wine producer. As Americans become more familiar with those

wines and show an increased preference for them, an increased __________________ the

South African rand will cause the dollar to __________________ relative to the rand.

A)demand for; depreciate

B)demand for; appreciate

C)supply of; depreciate

D)supply of; appreciate

Answer: A

D1 Interpretive

29.Considerable day-to-day volatility in major exchange rates is caused by

A)shifts in tastes or preferences for domestic versus foreign goods.

B)international capital mobility and expectations of future exchange rates.

C)sudden changes in productivity in one nation versus others.

D)highly variable inflation rates in some industrialized countries.

Answer: B

30.An increase in German Treasury interest rates, all else held constant, causes a rightward

shift in the __________________ euros and causes the dollar to __________________

against the euro.

A)supply of, appreciate

B)supply of, depreciate

C)demand for, appreciate

D)demand for, depreciate

Answer: D

D2 Applied

31.In comparing the returns on U.S. and German Treasury securities, investors

A)should forecast the future dollar/euro exchange rate.

B)may disregard the future dollar/euro exchange rate.

C)should assume the future dollar/euro exchange rate is the same as today's.

D)should assume the euro will depreciate if the German interest rate is above the U.S.

interest rate.

Answer: A

D2 Applied

32.Suppose that one-year Treasury bills yield 4 percent in the U.S. and 5 percent in Germany.

Investors will be indifferent between them if they expect the dollar over the next year to

A)depreciate against the euro by approximately 1 percent.

B)appreciate against the euro by approximately 1 percent.

C)depreciate against the euro by exactly 20 percent.

D)appreciate against the euro by exactly 20 percent.

Answer: B

D2 Applied

33.Suppose that one-year Treasury bills yield 6 percent in the U.S. and 4 percent in Britain.

Investors will be indifferent between them if they expect the dollar to

A)depreciate against the pound by approximately 2 percent.

B)appreciate against the pound by approximately 2 percent.

C)depreciate against the pound by approximately 33 percent.

D)appreciate against the pound by approximately 33 percent.

Answer: A

D2 Applied

34.Suppose that one-year Treasury bills yield 5 percent in the U.S. and 6 percent in France.

Investors will prefer the U.S. securities if they expect the dollar to __________________

against the euro over the next year.

A)depreciate by less than 1 percent

B)depreciate by more than 1 percent

C)appreciate by less than 1 percent

D)appreciate by more than 1 percent

Answer: D35.Suppose that one-year treasury bills yield 8 percent in the U.S. and 6 percent in Japan.

Investors will prefer to purchase the U.S. securities, unless they expect the dollar to

__________________ against the yen over the next year.

A)depreciate by less than 2 percent

B)depreciate by more than 2 percent

C)appreciate by less than 2 percent

D)appreciate by more than 2 percent

Answer: B

D2 Applied

36. A sudden expectation of future appreciation of the dollar causes funds to flow

__________________ the U.S. and the dollar to actually __________________.

A)out of; depreciate

B)out of; appreciate

C)into; depreciate

D)into; appreciate

Answer: D

D1 Factual

37. A worldwide system of fixed exchange rates was organized and maintained under the

International Monetary Fund

A)in the three decades before World War I.

B)in the years between the world wars.

C)from the end of World War II until the early 1970s.

D)from the early 1960s to the late 1980s.

Answer: C

D2 Factual

38.In 1992, Britain and Italy __________________ the European Monetary System and

__________________ against the other major European currencies.

A)joined; fixed their currency

B)joined; let their currency float

C)left; fixed their currency

D)left; let their currency float

Answer: D

D1 Interpretive

39.Which of the following countries did not adopt the euro as their currency?

A)Greece

B)Belgium

C)Great Britain

D)Finland

Answer: CD2 Interpretive

40.Under the IMF fixed exchange rate system, a nation running a balance of payments deficit

would have an excess __________________ its currency in the foreign exchange market

and that nation's central bank would have to __________________ some of its currency

to maintain the fixed exchange rate.

A)supply of; buy

B)supply of; sell

C)demand for; buy

D)demand for; sell

Answer: A

D1 Factual

41.Since the founding of the IMF, most international reserves have been held in

A)gold.

B)silver.

C)U.S. dollars.

D)British pounds sterling.

Answer: C

D2 Interpretive

42. A nation running a persistent balance of payments deficit while part of a fixed exchange

rate system would have to __________________ international reserves in an effort to

prevent its currency from __________________.

A)amass; appreciating

B)amass; depreciating

C)pay out; appreciating

D)pay out; depreciating

Answer: C

D2 Interpretive

43.Assume that there is an excess supply of euros in the foreign exchange market. If a fixed

exchange rate system exists with the United States, the European Central Bank would have

to __________________ to prevent the euro from __________________.

A)buy excess euros; appreciating

B)buy excess euros; depreciating

C)sell euros; appreciating

D)sell euros; depreciating

Answer: B

D1 Interpretive

44. A self-correcting mechanism tending to bring a country’s balance of payments into

equilibrium exists under __________________ exchange rate systems.

A)fixed and floating

B)floating, but not fixed

C)fixed, but not floating

D)neither fixed nor floating

Answer: BD1 Factual

45.Lowering a fixed exchange rate by a government is called a(n) of

that rate.

A)devaluation

B)revaluation

C)appreciation

D)depreciation

Answer: A

D2 Interpretive

46.To stay with a fixed exchange rate system, a nation that is losing most of its international

reserves will have no choice but to

A)ask for or declare a devaluation.

B)ask for or declare a revaluation.

C)let its currency depreciate.

D)let its currency appreciate.

Answer: A

D2 Interpretive

47.An exchange rate system under which currencies are allowed to fluctuate with frequent

interventions by central banks is called a

A)freely floating system.

B)fixed system.

C)managed floating system.

D)None of the above

Answer: C

D1 Factual

48.Today, central banks__________________ intervene to influence floating exchange rates.

A)never

B)seldom

C)frequently

D)are required

Answer: C

D2 Applied

49.If the British sell more Rolls Royce cars to the United States, the United States

__________________ more pounds and __________________ more dollars in the

foreign exchange market.

A)supplies; supplies

B)supplies; demands

C)demands; supplies

D)demands; demands

Answer: CD2 Applied

50. A decrease in German Treasury interest rates, all else held constant, causes a leftward shift

in the __________________ euros and causes the dollar to __________________ against

the euro.

A)supply of; appreciate

B)supply of; depreciate

C)demand for; appreciate

D)demand for; depreciate

Answer: C

D2 Interpretive

51. A sudden expectation of future depreciation of the dollar causes funds to flow

__________________ the United States and the dollar to actually __________________.

A)out of; depreciate

B)out of; appreciate

C)into; depreciate

D)into; appreciate

Answer: A

D3 Interpretive

52.Under the IMF fixed exchange rate system, a nation running a balance of payments surplus

would have an excess __________________ its currency in the foreign exchange market

and that nation's central bank would have to __________________ some of its currency.

A)supply of; buy

B)supply of; sell

C)demand for; buy

D)demand for; sell

Answer: D

D3 Interpretive

53. A nation running a persistent balance of payments surplus while part of a fixed exchange

rate system would be required to __________________ international reserves in an effort

to prevent its currency from __________________.

A)amass; appreciating

B)amass; depreciating

C)pay out; appreciating

D)pay out; depreciating

Answer: A

D2 Factual

54.The newest fixed exchange rate system is the

A)European Monetary System.

B)euro in the European Union countries.

C)Bretton Woods system.

D)gold standard.

Answer: B