International Financial Management 13th Edition By Jeff Test Bank Madura –

1. To force the value of the pound to appreciate against the dollar, the Federal Reserve should: a. sell dollars for pounds in the foreign exchange market and the European Central Bank (ECB) should sell dollars for pounds in the foreign exchange market. b. sell pounds for dollars in the foreign exchange market and the European Central Bank (ECB) should sell dollars for pounds in the 0 foreign exchange market. c. sell pounds for dollars in the foreign exchange market and the European Central Bank (ECB) should not intervene. d. sell dollars for pounds in the foreign exchange market and the European Central Bank (ECB) should sell pounds for dollars in the foreign exchange market. ANSWER: a POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.06.02 NATIONAL STANDARDS: United States – BUSPROG.INFM.MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Comprehension 2. A weak dollar is normally expected to cause: a. high unemployment and high inflation in the U.S. b. high unemployment and low inflation in the U.S. c. low unemployment and low inflation in the U.S. d. low unemployment and high inflation in the U.S. ANSWER: d POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: INFM.MADU.15.06.04 NATIONAL STANDARDS: United States – BUSPROG.INFM.MADU.15.03 STATE STANDARDS: United States – OH – DISC.INFM.MADU.15.02 KEYWORDS: Bloom’s: Comprehension 3. A strong dollar is normally expected to cause: a. high unemployment and high inflation in the U.S. b. high unemployment and low inflation in the U.S. c. low unemployment and low inflation in the U.S. d. low unemployment and high inflation in the U.S. ANSWER: