第十一章外汇市场.docx

第十一章外汇市场.docx

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第十一章外汇市场

Chapter11TheForeignExchangeMarket

11.1SingleChoice

1）Americanfirmsbecamelesscompetitivecomparedtoforeignfirmsduringthe1980sbecause

A）thequalityandproductivityofAmericanworkersdeclined.

B）foreignfirmswereyoungerthanAmericanfirmsandasaresulthadmoremodernfacilitiesthatmadeuseofthelatesttechnology.

C）theU.S.dollarbecameworthmoreintermsofforeigncurrencies.

D）theU.S.dollarbecameworthlessintermsofforeigncurrencies.

2）Aspottransactionintheforeignexchangemarketinvolvesthe

A）exchangeofexportsandimportsataspecifiedfuturedate.

B）exchangeofbankdepositsataspecifiedfuturedate.

C）immediate（withintwodays）exchangeofexportsandimports.

D）immediate（withintwodays）exchangeofbankdeposits.

3）WhenthevalueoftheBritishpoundchangesfrom$1.50to$1.25,thenthepoundhas_________andthedollarhas_________.

A）appreciated;appreciated

B）depreciated;appreciated

C）appreciated;depreciated

D）depreciated;depreciated

4）Whenthevalueofthedollarchangesfrom£0.5to£0.75,thenthepoundhas_________andthedollarhas_________.

A）appreciated;appreciated

B）depreciated;appreciated

C）appreciated;depreciated

D）depreciated;depreciated

5）Whentheexchangeratechangesfrom1.0eurostothedollarto1.2eurostothedollar,thentheeurohas_________andthedollarhas_________.

A）appreciated;appreciated

B）depreciated;appreciated

C）appreciated;depreciated

D）depreciated;depreciated

6）Whentheexchangeratechangesfrom1.0eurostothedollarto0.8eurostothedollar,thentheeurohas_________andthedollarhas_________.

A）appreciated;appreciated

B）depreciated;appreciated

C）appreciated;depreciated

D）depreciated;depreciated

7）Ifthedollar_________from1.2eurosperdollarto0.8eurosperdollar,theeuro_________from0.83dollarsto1.25dollarspereuro.

A）appreciates;appreciates

B）appreciates;depreciates

C）depreciates;depreciates

D）depreciates;appreciates

8）Ifthedollarappreciatesfrom0.8eurosperdollarto1.2eurosperdollar,theeurodepreciatesfrom_________dollarsto_________dollarspereuro.

A）1.25;0.83

B）0.83;1.25

C）0.67;1.50

D）1.50;0.67

9）IfthedollardepreciatesrelativetotheSwissfranc,

A）SwisschocolatewillbecomemoreexpensiveintheUnitedStates.

B）AmericancomputerswillbecomelessexpensiveinSwitzerland.

C）SwisschocolatewillbecomecheaperintheUnitedStates.

D）bothAandBoftheabove.

10）IfthedollarappreciatesrelativetotheSwissfranc,

A）SwisschocolatewillbecomemoreexpensiveintheUnitedStates.

B）AmericancomputerswillbecomelessexpensiveinSwitzerland.

C）SwisschocolatewillbecomecheaperintheUnitedStates.

D）bothAandBoftheabove.

11）Whentheexchangeratefortheeurochangesfrom$1.00to$1.20then,holdingeverythingelseconstant,theeurohas

A）appreciatedandGermancarssoldintheUnitedStatesbecomemoreexpensive.

B）appreciatedandGermancarssoldintheUnitedStatesbecomelessexpensive.

C）depreciatedandAmericanwheatsoldinGermanybecomesmoreexpensive.

D）depreciatedandAmericanwheatsoldinGermanybecomeslessexpensive.

12）Whentheexchangeratefortheeurochangesfrom$1.20to$1.00,then,holdingeverythingelseconstant,theeurohas

A）appreciatedandGermancarssoldintheUnitedStatesbecomemoreexpensive.

B）appreciatedandGermancarssoldintheUnitedStatesbecomelessexpensive.

C）depreciatedandAmericanwheatsoldinGermanybecomesmoreexpensive.

D）depreciatedandAmericanwheatsoldinGermanybecomeslessexpensive.

13）Thestartingpointforunderstandinghowexchangeratesaredeterminedisasimpleideacalled_________,whichstatesthatiftwocountriesproduceanidenticalgood,thepriceofthegoodshouldbethesamethroughouttheworldnomatterwhichcountryproducesit.

A）Gresham'slaw

B）thelawofoneprice

C）purchasingpowerparity

D）arbitrage

14）Thetheoryofpurchasingpowerparityisatheoryofhowexchangeratearedeterminedin

A）thelongrun.

B）theshortrun.

C）bothAandB.

D）noneoftheabove.

15）The_________statesthatexchangeratesbetweenanytwocurrencieswilladjusttoreflectchangesinthepricelevelsofthetwocountries.

A）theoryofpurchasingpowerparity

B）lawofoneprice

C）theoryofmoneyneutrality

D）quantitytheoryofmoney

16）Thetheoryofpurchasingpowerparitystatesthatexchangeratesbetweenanytwocurrencieswilladjusttoreflectchangesin

A）thetradebalancesofthetwocountries.

B）thecurrentaccountbalancesofthetwocountries.

C）fiscalpoliciesofthetwocountries.

D）thepricelevelsofthetwocountries.

17）Inthelongrun,ariseinacountry'spricelevel（relativetotheforeignpricelevel）causesitscurrencyto_________,whileariseinthecountry'srelativeproductivitycausesitscurrencyto_________

A）appreciate;appreciate.

B）appreciate;depreciate.

C）depreciate;appreciate.

D）depreciate;depreciate.

18）Ifthe2005inflationrateinBritainis6percent,andtheinflationrateintheU.S.is4percent,thenthetheoryofpurchasingpowerparitypredictsthat,during2005,thevalueoftheBritishpoundintermsofU.S.dollarswill

A）riseby10percent.

B）riseby2percent.

C）fallby10percent.

D）fallby2percent.

E）dononeoftheabove.

19）Thetheoryofpurchasingpowerparitycannotfullyexplainexchangeratemovementsbecause

A）notallgoodsareidenticalindifferentcountries.

B）monetarypolicydiffersacrosscountries.

C）somegoodsarenottradedbetweencountries.

D）bothAandCoftheabove.

E）bothBandCoftheabove.

20）Thetheoryofpurchasingpowerparitycannotfullyexplainexchangeratemovementsbecause

A）allgoodsareidenticalevenifproducedindifferentcountries.

B）monetarypolicydiffersacrosscountries.

C）somegoodsarenottradedbetweencountries.

D）fiscalpolicydiffersacrosscountries.

21）Increaseddemandforacountry's_________causesitscurrencytoappreciateinthelongrun,whileincreaseddemandfor_________causesitscurrencytodepreciate.

A）imports;imports

B）imports;exports

C）exports;imports

D）exports;exports

22）Ifthedemandfor_________goodsdecreasesrelativeto_________goods,thedomesticcurrencywilldepreciate.

A）foreign;domestic

B）foreign;foreign

C）domestic;domestic

D）domestic;foreign

23）Highertariffsandquotascauseacountry'scurrencyto_________inthe_________run.

A）depreciate;short

B）appreciate;short

C）depreciate;long

D）appreciate;long

24）Lowertariffsandquotascauseacountry'scurrencyto_________inthe_________run.

A）depreciate;short

B）appreciate;short

C）depreciate;long

D）appreciate;long

25）IftheinflationrateintheUnitedStatesishigherthanthatinGermanyandproductivityisgrowingataslowerrateintheUnitedStatesthanitisinGermany,inthelongrun,

A）theeuroshouldappreciaterelativetothedollar.

B）theeuroshoulddepreciaterelativetothedollar.

C）thereshouldbenochangeintheeuropriceofdollars.

D）itisnotclearwhatwillhappentotheeuropriceofdollars.

26）IftheFrenchdemandforAmericanexportsrisesatthesametimethatU.S.productivityrisesrelativetoFrenchproductivity,then,inthelongrun,

A）theeuroshouldappreciaterelativetothedollar.

B）thedollarshoulddepreciaterelativetotheeuro.

C）thedollarshouldappreciaterelativetotheeuro.

D）itisnotclearwhethertheeuroshouldappreciateordepreciaterelativetothedollar.

27）Thetheoryofassetdemandsuggeststhatthemostimportantfactoraffectingthedemandfordomesticandforeigndepositsis

A）theleveloftradeandcapitalflows.

B）theexpectedreturnontheseassetsrelativetooneanother.

C）theliquidityoftheseassetsrelativetooneanother.

D）theriskinessoftheseassetsrelativetooneanother.

28）WhenFrancoistheForeignerconsiderstheexpectedreturnondollardepositsintermsofforeigncurrency,theexpectedreturnmustbeadjustedfor

A）anyexpectedappreciationordepreciationofthedollar.

B）theinterestratesonforeigndeposits.

C）bothAandBoftheabove.

D）neither（a）nor（b）oftheabove.

29）Theexpectedreturnondollardepositsintermsofforeigncurrencyisthe_________theinterestrateondollardepositsandtheexpectedappreciationofthedollar.

A）productof

B）ratioof

C）sumof

D）differencein

30）Iftheinterestrateonforeigndeposits（iF）increases,holdingeverythingelseconstant,

A）theexpectedreturnonthesedepositsmustalsoincrease.

B）theexpectedreturnondomesticdepositsmustdecrease.

C）theexpectedreturnondomesticdepositsmustincrease.

D）bothAandBoftheabove.

E）bothAandCoftheabove.

31）Iftheinterestrateondollardepositsis10percent,andthedollarisexpectedtoappreciateby7percentoverthecomingyear,theexpectedreturnondollardepositsintermsoftheforeigncurrencyis

A）3percent.

B）10percent.

C）13.5percent.

D）17percent.

E）24percent.

32）Iftheinterestrateis7percentoneurodepositsand5percentondollardeposits,andifthedollarisexpectedtoappreciateata4percentrate,

A）eurodepositshaveahigherexpectedreturnthandollardeposits.

B）theexpectedreturnoneurodepositsintermsofdollarsis11percent.

C）theexpectedreturnondollardepositsintermsofeurosis1percent.

D）theexpectedreturnoneurodepositsintermsofdollarsis3percent.

E）theexpectedreturnondoll