Test Bank For Global business Today 6th
Edition, with verified Question &
Answers 2024 By Charles W.L.Hill
G.Tomas M. Hult (Graded A +)
A weaker dollar places ____ pressure on U.S. inflation, which in turn places ____
pressure on U.S. interest rates, which places ____ pressure on U.S. bond prices. -
ANS✔✔--upward; upward; downward
The euro is the currency: - ANS✔✔--none of the above
The euro has not been adopted by: - ANS✔✔--The UK
To force the value of the pound to appreciate against the dollar, the Federal Reserve
should: - ANS✔✔--Sell dollars for pound in the foreign exchange market and the
European Central Bank (ECB) should sell dollars for pounds in the foreign exchange
market.
A weak dollar is normally expected to cause: - ANS✔✔--low unemployment and high
inflation in the U.S.
A strong dollar is normally expected to cause: - ANS✔✔--high unemployment and low
inflation in the U.S.
To force the value of the British pound to depreciate against the dollar, the Federal
Reserve should: - ANS✔✔--sell pounds for dollars in the foreign exchange market
and the Bank of England should sell pounds for dollars in the foreign exchange market.
Consider two countries that trade with each other, called X and Y. According to the text,
inflation in Country X will have a greater impact on inflation in Country Y under the ____
system. Now, consider two other countries that trade with each other, called A and B.
Unemployment in Country A will have a greater impact on unemployment in Country B
under the ____ system. - ANS✔✔--floating rate; floating rate
A primary result of the Bretton Woods Agreement was: - ANS✔✔--establishing that
exchange rates of most major currencies were to be allowed to fluctuate 1% above or
below their initially set values.
, A primary result of the Smithsonian Agreement was: - ANS✔✔--establishing that
exchange rates of most major countries were to be allowed to fluctuate 2.25% above or
below their initially set values.
Under a fixed exchange rate system: - ANS✔✔--Under a fixed exchange rate system:
Under a managed float exchange rate system, the Fed may attempt to stimulate the
U.S. economy by ____ the dollar. Such an adjustment in the dollar's value should ____
the U.S. demand for products produced by major foreign countries. - ANS✔✔--
weakening; decrease
The value of the Canadian dollar, Japanese yen, and Australian dollar with respect to
the U.S. dollar are part of a: - ANS✔✔--managed float system.
The interest rate of a country with a currency board: - ANS✔✔--will move in tandem
with the interest rate of the currency to which it is tied.
The currency of Country X is pegged to the currency of Country Y. Assume that Country
Y's currency depreciates against the currency of Country Z. It is likely that Country X will
export ____ to Country Z and import ____ from Country Z. - ANS✔✔--more; less
Assume Countries A, B, and C produce goods that are substitutes of each other and
that these countries engage in trade with each other. Assume that Country A's currency
floats against Country B's currency, and that Country C's currency is pegged to B's. If
A's currency depreciates against B, then A's exports to C should ____, and A's imports
from C should ____. - ANS✔✔--increase; decrease
Assume a central bank exchanges its currency for other foreign currencies in the foreign
exchange market, but does not adjust for the resulting change in the money supply.
This is an example of: - ANS✔✔--nonsterilized intervention.
A strong dollar places ____ pressure on inflation, which in turn places ____ pressure on
the dollar. - ANS✔✔--downward; upward
The Fed may use a stimulative monetary policy with least concern about causing
inflation if the dollar's value is expected to: - ANS✔✔--strengthen
The exchange rate mechanism (ERM) refers to the method of linking ____ currencies to
each other within boundaries. - ANS✔✔--European
Countries that have adopted the euro must agree on a single ____ policy. - ANS✔✔--
monetary
Edition, with verified Question &
Answers 2024 By Charles W.L.Hill
G.Tomas M. Hult (Graded A +)
A weaker dollar places ____ pressure on U.S. inflation, which in turn places ____
pressure on U.S. interest rates, which places ____ pressure on U.S. bond prices. -
ANS✔✔--upward; upward; downward
The euro is the currency: - ANS✔✔--none of the above
The euro has not been adopted by: - ANS✔✔--The UK
To force the value of the pound to appreciate against the dollar, the Federal Reserve
should: - ANS✔✔--Sell dollars for pound in the foreign exchange market and the
European Central Bank (ECB) should sell dollars for pounds in the foreign exchange
market.
A weak dollar is normally expected to cause: - ANS✔✔--low unemployment and high
inflation in the U.S.
A strong dollar is normally expected to cause: - ANS✔✔--high unemployment and low
inflation in the U.S.
To force the value of the British pound to depreciate against the dollar, the Federal
Reserve should: - ANS✔✔--sell pounds for dollars in the foreign exchange market
and the Bank of England should sell pounds for dollars in the foreign exchange market.
Consider two countries that trade with each other, called X and Y. According to the text,
inflation in Country X will have a greater impact on inflation in Country Y under the ____
system. Now, consider two other countries that trade with each other, called A and B.
Unemployment in Country A will have a greater impact on unemployment in Country B
under the ____ system. - ANS✔✔--floating rate; floating rate
A primary result of the Bretton Woods Agreement was: - ANS✔✔--establishing that
exchange rates of most major currencies were to be allowed to fluctuate 1% above or
below their initially set values.
, A primary result of the Smithsonian Agreement was: - ANS✔✔--establishing that
exchange rates of most major countries were to be allowed to fluctuate 2.25% above or
below their initially set values.
Under a fixed exchange rate system: - ANS✔✔--Under a fixed exchange rate system:
Under a managed float exchange rate system, the Fed may attempt to stimulate the
U.S. economy by ____ the dollar. Such an adjustment in the dollar's value should ____
the U.S. demand for products produced by major foreign countries. - ANS✔✔--
weakening; decrease
The value of the Canadian dollar, Japanese yen, and Australian dollar with respect to
the U.S. dollar are part of a: - ANS✔✔--managed float system.
The interest rate of a country with a currency board: - ANS✔✔--will move in tandem
with the interest rate of the currency to which it is tied.
The currency of Country X is pegged to the currency of Country Y. Assume that Country
Y's currency depreciates against the currency of Country Z. It is likely that Country X will
export ____ to Country Z and import ____ from Country Z. - ANS✔✔--more; less
Assume Countries A, B, and C produce goods that are substitutes of each other and
that these countries engage in trade with each other. Assume that Country A's currency
floats against Country B's currency, and that Country C's currency is pegged to B's. If
A's currency depreciates against B, then A's exports to C should ____, and A's imports
from C should ____. - ANS✔✔--increase; decrease
Assume a central bank exchanges its currency for other foreign currencies in the foreign
exchange market, but does not adjust for the resulting change in the money supply.
This is an example of: - ANS✔✔--nonsterilized intervention.
A strong dollar places ____ pressure on inflation, which in turn places ____ pressure on
the dollar. - ANS✔✔--downward; upward
The Fed may use a stimulative monetary policy with least concern about causing
inflation if the dollar's value is expected to: - ANS✔✔--strengthen
The exchange rate mechanism (ERM) refers to the method of linking ____ currencies to
each other within boundaries. - ANS✔✔--European
Countries that have adopted the euro must agree on a single ____ policy. - ANS✔✔--
monetary
