Chapter_6_Government_Influence_on_Exchange_Rates

1、Chap ter 6 Government In flue nee on Excha nge Rates 1. To force the value of the pound to app reciate aga inst the dollar, the Federal Reserve should:A) sell dollars for pounds in the foreig n excha nge market and the European Cen tral Bank (ECB) should sell dollars for pounds in the foreig n excha

2、 nge market.B) sell pounds for dollars in the foreig n excha nge market and the European Cen tral Bank (ECB) should sell dollars for pounds in the foreig n excha nge market.C) sell pounds for dollars in the foreig n excha nge market and the European Cen tral Bank (ECB) should not in terve ne.D) sell

3、 dollars for pounds in the foreig n excha nge market and the European Cen tral Bank (ECB) should sell pounds for dollars in the foreig n excha nge market.ANSWER: A2. A weak dollar is no rmally exp ected to cause:A) high unemployment and high in flatio n in the U.S.B) high unemployment and low in fla

4、ti on in the U.S.C) low unemployment and low in flati on in the U.S.D) low unemployment and high in flati on in the U.S. 疲軟的美元一低失業(yè)率+高通脹ANSWER: D3. A strong dollar is no rmally exp ected to cause:A) high unemployment and high in flatio n in the U.S.B) high unemployment and low in flati on in the U.S.

5、C) low unemployment and low in flati on in the U.S.D) low unemployment and high in flati on in the U.S.ANSWER: B4. To force the value of the British pound to depreciate against the dollar, the FederalReserve should:A) sell dollars for pounds in the foreig n excha nge market and the Bank of En gla nd

6、 should sell dollars for pounds in the foreig n excha nge market.B) sell pounds for dollars in the foreig n excha nge market and the Bank of En gla nd should sell dollars for pounds in the foreig n excha nge market.C) sell pounds for dollars in the foreign excha nge market and the Bank of England sh

7、ould sell pounds for dollars in the foreig n excha nge market.D) sell dollars for pounds in the foreig n excha nge market and the Bank of En gla nd should sell pounds for dollars in the foreig n excha nge market.ANSWER: C5. Con sider two coun tries that trade with each other, called X and Y. Accord

8、ing to the text, in flati on in Country X will have a greater impact on in flati on in Country Y un der the system. Now, con sider two other coun tries that trade with each other, called A and B. Unemployment in Country A will have a greater impact on unemployment in Country B un der thesystem.A) fl

9、oat ing rate; fixed rateB) floati ng rate; floati ng rateC) fixed rate; fixed rateD) fixed rate; floati ng rate固定匯率傳染ANSWER: C6. A p rimary result of the Brett on Woods Agreeme nt was:A) the establishme nt of the European Mon etary System (EMS).B) establish ing sp ecific rules for whe n tariffs and

10、quotas could be impo sed by gover nments.C) establish ing that excha nge rates of most major curre ncies were to be allowed to fluctuate 1% above or below their in itially set values.D) establish ing that excha nge rates of most major curre ncies were to be allowed to fluctuate freely without boun d

11、aries (although the cen tral banks did have the right to in terve ne whe n n ecessary).ANSWER: C7. A p rimary result of the Smiths onian Agreeme nt was:A) the establishme nt of the European Mon etary System (EMS).B) establish ing that excha nge rates of most major coun tries were to be allowed to fl

12、uctuate 2.25% above or below their initially set values.C) establish ing sp ecific rules for whe n tariffs and quotas could be imp osed by gover nmen ts.D) establish ing that excha nge rates of most major curre ncies were to be allowed to fluctuate freely without boun daries (although the cen tral b

13、anks did have the right to in terve ne whe n n ecessary).ANSWER: B8. Un der a fixed excha nge rate system:A) a foreig n excha nge market does not exist.B) cen tral bank in terve nti on in the foreig n excha nge market is not n ecessary.C) cen tral bank in terve ntio n in the foreig n excha nge marke

14、t is often necessary.D) cen tral bank in terve nti on in the foreig n excha nge market is n ot allowed.ANSWER: C9. Un der a man aged float excha nge rate system, the Fed may atte mpt to stimulate the U.S. economy bythe dollar. Such an adjustme nt in the dollar's value shouldthe U.S. dema nd for

15、p roducts p roduced by major foreig n coun tries.A) weake ning; in creaseB) weake ning; decreaseC) stre ngthe ning; in creaseD) stre ngthe ning; decreaseANSWER: B10. The value of the Can adia n dollar, Ja pan ese yen, and Australia n dollar with respect to the U.S. dollar are part of a:A) p egged sy

16、stem.B) fixed system.C) man aged float system.D) crawli ng peg system.ANSWER: C11. The in terest rate of a country with a curre ncy board:A) is less stable tha n it would be without a curre ncy board.B) is typ ically below the in terest rate of the curre ncy to which it is tied.C) will move in tande

17、m with the in terest rate of the curre ncy to which it is tied.D) is compi etely independent of the in terest rate of the curre ncy to which it is tied.ANSWER: C12. The curre ncy of country X is p egged to the curre ncy of country Y. Assume that county Y's curre ncy dep reciates aga inst the cur

18、re ncy of country Z. It is likely that country X will exportto country Z and importfrom country Z.A) more; moreB) less; lessC) more; lessD) less; moreANSWER: C13. Assume coun tries A, B, and C p roduce goods that are substitutes of each other and that these coun tries en gage in trade with each othe

19、r. Assume that country A's curre ncy floats aga inst country B's curre ncy, and that country C's curre ncy is p egged to B's. If A's curre ncy dep reciates aga inst B, the n A's exp orts to C should, and A's imp ortsfrom C should.A) decrease; in creaseB) decrease; decreas

20、eC) in crease; decreaseD) in crease; in creaseANSWER: C14. Assume a cen tral bank excha nges its curre ncy for other foreig n curre ncies in the foreig n excha nge market, but does not adjust for the result ing cha nge in the money supply. This is an exa mple of:A) p egged in terve nti on.B) in dire

21、ct in terve nti on.C) non sterilized in terve nti on.D) sterilized in terve nti on.E) A and DANSWER: C15. If the Fed desires to weake n the dollar without affect ing the dollar money suppl y, it should:A) excha nge dollars for foreig n curre ncies, and sell some of its exist ing Treasury security ho

22、ldi ngs for dollars.B) excha nge foreig n curre ncies for dollars, and sell some of its existi ng Treasury security holdi ngs for dollars.C) excha nge dollars for foreig n curre ncies, and buy existi ng Treasury securities with dollars.D) excha nge foreig n curre ncies for dollars, and buy existi ng

23、 Treasury securities with dollars.ANSWER: A16. Which of the followi ng is an exa mple of direct in terve ntio n in foreig n excha nge markets?A) loweri ng in terest rates.B) in creas ing the disco unt rate.C) excha nging dollars for foreig n curre ncy.D) imposing barriers on intern ati onal trade.AN

24、SWER: Cp ressure on in flati on, which in turn pl aces17. A strong dollar p laces p ressure on the dollar.A) up ward; up wardB) dow nward; up wardC) up ward; dow nwardD) dow nward; dow nwardANSWER: B18. The Fed may use a stimulative mon etary p olicy with least concern about caus ing in flati on if

25、the dollar's value is exp ected to:A) remai n stable.B) stre ngthe n.C) weake n.D) none of the above will have an imp act on in flati on.ANSWER: B19. A weaker dollar p lacesp ressure on U.S. in flati on, which in turn p laces _p ressure on U.S. in terest rates, which p lacesp ressure on U.S. bon

26、d p rices.A) up ward; dow nward; up wardB) up ward; dow nward; dow nwardC) up ward; up ward; dow nwardD) dow nward; up ward; up wardE) dow nward; dow nward; up wardANSWER: C20. The euro is the curre ncy:A) adop ted in all wester n European coun tries as of 1999.B) adop ted in all easter n European c

27、oun tries as of 1999.C) ado pted in all European coun tries as of 1999.D) none of the aboveANSWER: D21. Assume that Lithua nia (a member of the European Union) wishes to adopt the euro as its curre ncy. Which of the follow ing is not a requireme nt Lithua nia must meet?A) restrict the moveme nts of

28、the euro relative to its home curre ncy within a range of p lusor minus 15 percent from an in itially set excha nge rate.B) limit i nflatio n.C) limit the Lithua nian budget deficit.D) in crease GDP growth by 3% annu ally.ANSWER: D22. The excha nge rate mecha nism (ERM) refers to the method of linki

29、ng curre ncies to each other with in boun daries.A) Lati n America nB) EuropeanC) Asia nD) North America nANSWER: B23. Coun tries that have ado pted the euro must agree on a sin gleA) mon etaryB) fiscalC) worker compen satio nD) foreig n relati onsp olicy.ANSWER: A24. The excha nge rate mecha nism (

30、ERM) crisis in 1992 rep rese nts the Germa n in terest rates that caused other European in terest rates toresulted in less aggregate spending.A) in crease; in creaseB) in crease; decreaseC) decrease; decreaseD) decrease; in creasein,andANSWER: A25. The risk-free in terest rates among coun tries that have adop ted the euro should:A) are n ot n ecessarily similar to r