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Exchange Rates & Currency Changes Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. When the American dollar buys more than its equivalent in another currency, it is considered to be _____ the other currency.

Question 2 2. What would you expect if there is an increase in exchange rate?

Question 3 3. How can a fiscal policy affect exchange rates?

Question 4 4. All of the following are types of exchange rates that countries can use, except:

Question 5 5. How is domestic currency related to exports?

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Question 6 6. If U.S. exports to Japan increased, what most likely happened?

Question 7 7. The U.S. dollar is valued at 0.94 euros. If arbitrage occurs, what will happen to the value of the dollar?

Question 8 8.

Assume the following exchange rates:

1 Dollar = 102 Japanese Yen

1 Dollar = 0.6 British Pound

1 Dollar = 0.91 Swiss Franc

1 Dollar = 13 Pesos

Which of the following is the least amount of money?

Question 9 9. In the event that prices don't match, a consumer will look to the lesser price country to buy the product in order to save money. This is known as _____.

Question 10 10. When expansionary monetary policy leads to a decrease in interest rates, the exchange rate _____.

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Question 11 11. An increase in the value of a domestic currency will mainly affect _____.

Question 12 12. _____ are goods that are produced in a home country, but sold to foreign countries.

Question 13 13. If the exchange rate between the U.S. dollar and Mexican Peso is 13 Pesos to 1 U.S. dollar, how many dollars would a gallon of ice cream costing 52 pesos be?

Question 14 14. Which exchange rate would most likely be used for a good or service that will be delivered at a future date?

Question 15 15. Which of the following statements regarding an exchange rate is not true?

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Question 16 16. Which of the following is an example of a law of one price provision?

Question 17 17. Which of the following is true of purchasing power?

Question 18 18. The exchange rate between two countries will remain the same as the ratio of the price levels for the same two countries. This is an example of _____.

Question 19 19. What is most likely to happen with a strong dollar?

Question 20 20. Identify the situation where a weak currency, or lower exchange rate, can be beneficial.

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Question 21 21. Predict the effect on the exchange rate when the Federal Reserve uses monetary policy to increase income or available money.

Question 22 22.

Consider a scenario where there has been a decrease in the exchange rate of the American dollar.

How will the inflation and import prices vary?

Question 23 23. What is true about contractionary monetary or fiscal policy?

Question 24 24. Deduce the effects of having a higher exchange rate for the U.S. dollar on foreign currencies and imports.

Question 25 25. What are goods that are produced in a foreign country but sold in a home country called?

Exchange Rates & Currency Changes Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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