Question : Figure 19-11 41) Refer to Figure 19-11. Which of the events : 1244947

Figure 19-11

41) Refer to Figure 19-11. Which of the events below cause the shifts in the supply and demand curves in the market for dollars against the British pound shown in the graph above?

A) interest rates rise in England

B) interest rates rise in the United States

C) real income rises in the United States

D) real income falls in England

42) Refer to Figure 19-11. Consider the market for U.S. Dollars against the British pound shown in the graph above. From this graph we can conclude that the dollar price of a British pound has ________ to ________ dollars per pound

A) decreased; 0.46

B) increased; 2.17

C) decreased; 2.00

D) increased; 0.50

Figure 19-12

43) Refer to Figure 19-12. Consider the market for U.S. dollars against the Japanese yen shown above. An event which could have caused the changes shown in the graph would be

A) an increase in U.S. real income.

B) speculators expect the dollar to depreciate in value in the near future.

C) an economic expansion in the United States

D) a decrease in Japanese interest rates.

44) If the nominal exchange rate between the American dollar and the New Zealand dollar is 1.36 New Zealand dollars per American dollar, how many American dollars are required to buy a product that costs 3.50 New Zealand dollars?

A) $2.14

B) $2.24

C) $2.57

D) $4.76

45) You’re traveling in Japan and are thinking about buying a new kimono. You’ve decided you’d be willing to pay $175 for a new kimono, but kimonos in Japan are all priced in yen. If the exchange rate is 89 yen per dollar, what is the highest price in yen you’d be willing to pay for a kimono? (Assume no taxes or duties are associated with the purchase.)

A) 1.97 yen

B) 330.75 yen

C) 15,575 yen

D) 19,425 yen

46) You’re traveling in Japan and are thinking about buying a new kimono. You’ve decided you’d be willing to pay $175 for a new kimono, but kimonos in Japan are all priced in yen. If the kimono you’re looking at costs 14,000 yen, under which of the following exchange rates would you be willing to purchase the kimono? (Assume no taxes or duties are associated with the purchase.)

A) 24.5 yen per dollar

B) 65 yen per dollar

C) 80 yen per dollar

D) You would purchase the new kimono at any of the above exchange rates.

47) When the market value of the dollar falls relative to other currencies around the world, we say that

A) the dollar has appreciated.

B) the dollar has depreciated.

C) the demand for dollars has decreased.

D) the supply of dollars has decreased.

48) Currency traders expect the value of the dollar to rise. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

A) Demand for dollars will increase, and supply of dollars will decrease.

B) Demand for dollars will increase, and supply of dollars will increase.

C) Demand for dollars will decrease, and supply of dollars will increase.

D) Demand for dollars will decrease, and supply of dollars will decrease.

49) If there is currently a shortage of dollars, which of the following would you expect to see in the foreign exchange market?

A) The dollar will appreciate.

B) The dollar will depreciate.

C) There will be an increase in the demand for dollars.

D) There will be an increase in the supply of dollars.

50) Currency traders expect the dollar to depreciate. What impact will this have on equilibrium in the foreign exchange market?

A) The dollar will appreciate, and the equilibrium quantity of dollars will decrease.

B) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease.

C) The dollar will appreciate, and the equilibrium quantity of dollars will increase.

D) The dollar will depreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined.