Question : 51) If people expect the future exchange rate for dollars : 1240710

51) If people expect the future exchange rate for dollars will be lower, then in the foreign exchange market the current

A) quantity demanded of dollars decreases.

B) quantity demanded of dollars increases.

C) demand for dollars decreases.

D) demand for dollars increases.

E) supply of dollars decreases.

52) The ________ the expected future exchange rate, the greater is the expected profit from holding dollars and so the ________.

A) lower; supply curve of dollars shifts rightward

B) higher; demand curve for dollars shifts leftward

C) higher; supply curve of dollars shifts leftward

D) lower; demand curve for dollars shifts leftward

E) higher; supply curve of dollars shifts rightward

53) In the foreign exchange market, which of the following shifts the demand curve for dollars rightward?

A) The expected future exchange rate rises.

B) The expected future exchange rate falls.

C) The current exchange rate falls.

D) The current exchange rate rises.

E) None of the above answers is correct.

54) In the foreign exchange market, which of the following shifts the supply curve of dollars leftward?

A) The expected future exchange rate rises.

B) The expected future exchange rate falls.

C) The current exchange rate rises.

D) The current exchange rate falls.

E) None of the above answers is correct.

55) If the expected future U.S. exchange rate falls, then in the foreign exchange market the current

A) quantity supplied of dollars decreases.

B) quantity supplied of dollars increases.

C) supply of dollars decreases.

D) supply of dollars increases.

E) demand for dollars increases.

56) The expected future exchange rate has ________ on the supply of dollars and has ________ on the demand for dollars.

A) no effect; no effect

B) no effect; an effect

C) an effect; no effect

D) an effect; an effect

E) an effect sometimes; an effect sometimes

57) If the expected future exchange rate decreases, then the supply of dollars ________ and the demand for dollars ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

58) If the equilibrium exchange rate of the dollar is 1.10 euros per dollar and currently the exchange rate is 0.90 euros per dollar, then there is a ________ of dollars that leads to ________.

A) surplus; a rise in the exchange rate

B) shortage; the demand curve for dollars shifting rightward

C) surplus; the supply curve of dollars shifting leftward

D) shortage; a rise in the exchange rate

E) shortage; the supply curve of dollars shifting rightward

59) The equilibrium exchange rate is 0.70 euros per dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 trillion a day. If the exchange rate is now 0.80 euros per dollar, then

A) there is a shortage of dollars and the exchange rate falls.

B) there is a surplus of dollars and the exchange rate rises.

C) there is no change.

D) there is a surplus of dollars and the exchange rate falls.

E) there is a shortage of dollars and the exchange rate rises.

60) The equilibrium exchange rate is 0.70 euros per dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 trillion a day. If the exchange rate is now 0.60 euros per dollar, then

A) there is a shortage of dollars and the exchange rate rises.

B) there is a surplus of dollars and the exchange rate rises.

C) there is a shortage of dollars and the exchange rate falls.

D) there is a surplus of dollars and the exchange rate falls.

E) there is no change.