27. An increase in the U.S. demand for the Mexican peso Select one: a. causes an

ID: 1159352 • Letter: 2

Question

27. An increase in the U.S. demand for the Mexican peso

Select one:

a. causes an increase in the U.S. dollar price of a Mexican peso.

b. causes Mexican goods to be cheaper.

c. causes the U.S. dollar to depreciate.

d. causes the Mexican peso to appreciate.

28. The terms of trade are

Select one:

a. exports plus imports divided by GDP.

b. the value of the real exchange rate.

c. the ratio of export prices to import prices.

d. the terms negotiated in a trade agreement.

29. One of the main causes of economic inequality in Latin America is the

Select one:

a. lack of governmental interest in solving the problem of inequality.

b. lack of progress in raising agricultural productivity.

c. failure of governments to support urban consumers.

d. focus of governments on agricultural exports to the detriment of food production.

e. oil crisis of the 1970s.

30. China linked its exchange rate to the U.S. dollar which meant in the 2004-2007 period

Select one:

a. it depreciated against most other currencies, making its products cheaper.

b. it overvalued its currency, making it hard to attract foreign investment.

c. it decreased the size of its merchandise trade surplus.

d. it appreciated against most other currencies, hurting its manufacturing competitiveness.

a) "D"

Cause the Mexican peso to Appreciate.

b) "C"

The value of the import price and export prices.

c) "B"

Lack of progress in raising agricultural productivity.

d) "A"

It depreciated against most other currencies, making its product cheaper.

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