Chapter 4 Exchange Rate Determination 1. The value of the Australian dollar (A$) today is $0.73. Yesterday‚ the value of the Australian dollar was $0.69. The Australian dollar _______ by _______%. A) depreciated; 5.80 B) depreciated; 4.00 C) appreciated; 5.80 D) appreciated; 4.00 ANSWER: C SOLUTION: ($0.73 – $0.69)/$0.69 = 5.80% 2. If a currency’s spot rate market is _______‚ its exchange rate is likely to be _______ to a single large purchase or sale
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when they coordinate and control worldwide operations and subsidiaries. a. True b. False (17-3) Currency appreciation F T Answer: a EASY [iii]. When the value of the U.S. dollar appreciates against another country’s currency‚ we may purchase more of the foreign currency with a dollar. a. True b. False (17-3) Floating exchange rates F T Answer: a EASY [iv]. The United States and most other major industrialized nations currently operate under a system of
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The Case of pegging the Exchange Rate of Oil-Exporting Economies to the Dollar High oil prices are again transforming oil-exporting economies. Economies that were declining when oil hovered in the $20s for most of the 1990s—and at risk of bankruptcy when oil dipped to $10 a barrel in 1998—are now booming. A new generation of skyscrapers is rising in the Gulf‚ in St. Petersburg‚ and in Moscow. Government reserves in oil-exporting economies are overflowing with the governments’ large cut from the
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terms of another. B) Tied to the price of gold. D) All of the above. Answer: C Type: Basic Understanding Page: 437 FOREIGN-EXCHANGE MARKETS 3. The U.S. demand for foreign currency represents: A) A demand for U.S. dollars. B) A supply of U.S. dollars. C) The foreign demand for U.S. exports. D) A point of disequilibrium in the foreign-exchange market. Answer: B Type: Basic Understanding Page: 437 4. The U.S. demand for foreign currency arises from speculation and
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convertibility are considered something of a golden age in contrast to the six-year debacle of the interwar gold standard. Yet‚ from the moment of full convertibility on current account transactions in 1959‚ the steady growth of official and private liquid dollar claims in the hands of foreigners and the
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supplies of dollars held by foreign banks. B) a U.S. demand for foreign monies and the satisfaction of this demand increases the supplies of dollars held by foreign banks. C) a foreign demand for dollars and the satisfaction of this demand decreases the supplies of foreign monies held by U.S. banks. D) a foreign demand for dollars and the satisfaction of this demand increases the supplies of foreign monies held by U.S. banks. 2. U.S. import transactions create: A) a foreign demand for dollars and the
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AmountExchange Rate | Currency Type | Choose correct type | Currency Type | Enter Currency Amount | Calculate total to the nearest Dollar amount | Dollar Amount | Foreign Currency Amount | Convert to U.S. Dollars | U.S. Currency Amount | Currency TypeCurrency AmountExchange Rate | Display Results | Conversion Of foreign Currency into U.S. Dollars | Hierarchy Chart Main Module Main Module Display Menu Module Display Menu Module Get Currency Module Get Currency Module
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Gold Exchange Standard Bretton Woods Collapse Smithsonian Agreement Group Members Neha Bansod 8 Lilly Geddam 36 Sharvari Talashilkar 26 Meet Topiwala 15 Rovan Pinto 16 Gaurav Jain 19 Gaurav | | Gold-Exchange
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relative to Canadian inflation. Other things being equal‚ how should this affect the (a) U.S. demand for Canadian dollars‚ (b) supply of Canadian dollars for sale‚ and (c) equilibrium value of the Canadian dollar? (a) The demand for Canadian dollars should increase. (b) The supply of Canadian dollars for sale should decrease. (c) The equilibrium value of the Canadian dollar should increase. 3) Assume U.S. interest rates fall relative to British interest rates. Other things being equal‚ how
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worth of machines. When the deal was signed‚ Pfeiffer calculated that at the agreed price‚ the machines would yield a profit of € 30‚000 each. Within three days that profit had declined by €8‚000 due to adverse depreciations in dollar as DaimlerChrysler used to pay Elotherm in dollars. Udo Pfeiffer‚ the CEO of SMS Elotherm neglected this issue and fell into serious trouble and it went from bad to worse because due to intense competition‚ it could not charge higher prices for the tools. On the other hand
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