The supply of U.S. dollars on foreign exchange markets is Answer 1. derived from the supply of U.S. goods. 2. derived from the demand by United States for imported goods and services. 3. determined directly by open market operations at the Federal Reserve Bank. 4. derived from the demand for U.S. products by foreigners.

Suppose that the U.S. dollar appreciates against the Japanese Yen. What will occur as a result? purchasing power parity will begin to hold U.S. exports to Japan will become cheaper and increase, imports from Japan to the U.S. will become more expensive and decline U.S. currency becomes over-valued relative to Japanese currency U.S. exports to Japan will become more expensive and decline, imports from Japan to the U.S. will become cheaper and increase

Country A’s goods have become relatively more expensive for Country B’s buyers due to a change in the exchange rate between those two country’s currencies. All other things remaining constant, this could be because Country B’s currency has __________ relative to Country A’s currency. a) depreciated b) shifted c) stagnated d) appreciated

If the European euro were to depreciate relative to the U.S. dollar in the foreign exchange market, would it be easier or harder for the French to sell their wine in the United States? Suppose you were planning a trip to Paris. How would depreciation of the euro change the dollar cost of your trip?

An appreciation of the exchange value of the U.S. dollar would: A) increase the dollar prices of U.S. imports and the foreign cost of exports from the U.S. B) decrease the dollar prices of U.S. imports and the foreign cost of exports from the U.S. C) increase the dollar prices of U.S. imports, but decrease the foreign cost of exports from the U.S. D) decrease the dollar prices of U.S. imports, but increase the foreign cost of exports from the U.S.

If the exchange rate between the US Dollar ($) and the Euro (E) goes from being $5/E to $6/E, we say that the US Dollar has __________ relative to the Euro. a) depreciated b) stagnated c) appreciated d) arbitraged

What is the effect of a devaluation of a domestic currency?     A) Domestic goods will become cheaper in terms of foreign currency, and consequently exports will decrease.   B) Domestic goods will become more expensive in terms of foreign currency, and consequently exports will decrease.   C) Domestic goods will become cheaper in terms of foreign currency, and consequently exports will increase.   D) Domestic goods will become more expensive in terms of foreign currency, and consequently exports will increase.

Find the U.S. dollar value of each of the following currencies at the given exchange rates: a. $1=C$.96(Canadian dollars) b.$1= 81 yen (Japanese Yen) c. $1=A$.95(Australian dollars) d. $1= SKR 6 (Swedish kronor) e. $1=SF .90 (Swiss francs)