INTERNATIONAL TRADE FINAL EXAM ECON
436 2026 FULL QUESTIONS AND SOLUTIONS
ALREADY PASSED
◉ Which of the following are in place when government imposes
limits on or requires approvals for payments related to some (or all)
international financial investment activities?
A) Adjustable pegs
B) Exchange controls
C) Capital controls
D) Official interventions Answer: c) capital controls
◉ An increase in U.S. imports of goods and services from the
European Union (EU) countries will result in a(n) ________ euro and
a(n) _________
U.S. dollars in the foreign exchange market.
A) surplus of; shortage of
B) increase in the demand for; increase in the supply of
C) decrease in the demand for; decrease in the supply of
D) increase in the supply of; increase in the demand for Answer: b)
increase in the demand for; increase in the supply of
, ◉ Action to reverse the effect of official intervention on the domestic
money supply is called
A) the gold standard.
B) a parallel market.
C) a crawling peg.
D) sterilization Answer: d) sterilization
◉ Under a floating exchange-rate system, everything remaining
constant, an increase in European exports to Japan is most likely to
result
in
A) an appreciation of the euro vis-a-vis the Japanese yen.
B) a decrease in the supply of euro in the foreign exchange market.
C) an appreciation of the Japanese yen vis-a-vis the euro.
D) a decrease in the demand for euro in the foreign exchange
market. Answer: an appreciation of the euro vis-a-vis Japanese yen
◉ Consider that Britain is trying to maintain a fixed exchange rate
with respect to the U.S. dollar. However, the present situation in the
foreign exchange market is conducive for the British pound to
depreciate with respect to the U.S. dollar. Which of the following
interventions will stem the pressures for depreciation of the pound?
A) The government of Britain should sell pounds and buy dollars.
436 2026 FULL QUESTIONS AND SOLUTIONS
ALREADY PASSED
◉ Which of the following are in place when government imposes
limits on or requires approvals for payments related to some (or all)
international financial investment activities?
A) Adjustable pegs
B) Exchange controls
C) Capital controls
D) Official interventions Answer: c) capital controls
◉ An increase in U.S. imports of goods and services from the
European Union (EU) countries will result in a(n) ________ euro and
a(n) _________
U.S. dollars in the foreign exchange market.
A) surplus of; shortage of
B) increase in the demand for; increase in the supply of
C) decrease in the demand for; decrease in the supply of
D) increase in the supply of; increase in the demand for Answer: b)
increase in the demand for; increase in the supply of
, ◉ Action to reverse the effect of official intervention on the domestic
money supply is called
A) the gold standard.
B) a parallel market.
C) a crawling peg.
D) sterilization Answer: d) sterilization
◉ Under a floating exchange-rate system, everything remaining
constant, an increase in European exports to Japan is most likely to
result
in
A) an appreciation of the euro vis-a-vis the Japanese yen.
B) a decrease in the supply of euro in the foreign exchange market.
C) an appreciation of the Japanese yen vis-a-vis the euro.
D) a decrease in the demand for euro in the foreign exchange
market. Answer: an appreciation of the euro vis-a-vis Japanese yen
◉ Consider that Britain is trying to maintain a fixed exchange rate
with respect to the U.S. dollar. However, the present situation in the
foreign exchange market is conducive for the British pound to
depreciate with respect to the U.S. dollar. Which of the following
interventions will stem the pressures for depreciation of the pound?
A) The government of Britain should sell pounds and buy dollars.
