1. Flexible exchange rate systems occur when: 2. If the demand curve for dollars

Question

1. Flexible exchange rate systems occur when:

2. If the demand curve for dollars shifts to the right:

3. If the supply curve for dollars shifts to the right relativeto the British pound:

4. With a system of flexible floating exchange rates, a UnitedStates trade deficit with Japan will lead to:

5. When the dollar appreciates, it means that:

6. Which of the following is a likely consequence when thedollar declines in value against other currencies?

7. If fewer dollars are needed to buy a German mark:

8. Other things equal, higher U.S. income would:

9. With a system of floating exchange rates,holding everything else constant, a Mexican trade deficit with theUnited States will result in:

Explanation / Answer

1. 4

2. 3

3. 2

4. 4

5. 3

6. 1

7. 2

8. 3

9. 4

10. 1

11. 4

12. 1

13. 3

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