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The exchange rate system that exists in the 21st century ______.
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Was not planned, but occurred by accident
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When the Japanese yen appreciates relative to the U.S. dollar, ceteris paribus, then ______.
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U.S. consumers need a greater number of dollars to buy a given number of Japanese yen
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If U.S. consumers were to receive fewer and fewer British pounds per U.S. dollar, the effect would be ______, ceteris paribus.
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Increasing prices for imports of British goods to the United States
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During the late 1970s the U.S. government attempted but mostly failed to ______.
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Prevent depreciation of the U.S. dollar
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If currency speculators believe that the value of the U.S. dollar will soon be falling because of an anticipated rise in the U.S. inflation rate compared to the Japanese inflation rate, ______.
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Those who are holding U.S. dollars will convert them to yen
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When the U.S. dollar appreciates compared to the yen, this means that ______.
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A U.S. dollar can buy more units of yen than before
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An increase in European tastes for U.S. goods, ceteris paribus, would ______.
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Increase the supply of euros on the euro foreign exchange market
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An increase in average U.S. incomes, ceteris paribus, will lead to ______ demand for euros and a(n) ______ exchange rate for the euro.
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Increased; higher
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Which of the following statements accurately describes capital movements?
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In an open economy, individuals, firms, and governments are able to borrow from and lend to foreigners.
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Which of the following statements accurately describes the supply curve for euros?
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There is a positive relationship between the dollar price of euros and the quantity of euros supplied.
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Which of the following statements accurately describes the demand curve for euros?
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There is an inverse relationship between the dollar price of euros and the quantity of euros demanded.
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A strong U.S. dollar will ______ the price of imports and make trips to foreign countries ______.
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Lower; less expensive
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Suppose the United States receives more humanitarian aid from foreigners than it supplies abroad. How would this impact the balance of payments?
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Net unilateral transfers would be positive.
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Which of the following line items is a credit in the current account?
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Service exports
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Which of the following statements accurately defines the current account?
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It is a record of a country’s imports and exports of goods and services, net investment income, and net transfers.
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Purchasing-power-parity theory is about how exchange rates move to equalize the purchasing power of different______.
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Currencies
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A record of foreign purchases or assets is called______ account.
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Financial
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The price of one unit of a country’s currency in terms of another country’s currency is called the exchange rate.
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True
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Fluctuations in currency values are determined by_____.
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Government
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Record of country’s imports,net investment and net transfers
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Current account
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The net surplus or deficit resulting from the level of exportation and importation of merchandise is called _____ of trade.
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Balance
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The record of international transactions in which a nation has engaged over a _____ is called the balance of payments.
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Year
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