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1. This is true under floating exchange rates: When CA < 0 the home currency app

ID: 1202452 • Letter: 1

Question

1. This is true under floating exchange rates:

When CA < 0 the home currency appreciates

When CA < 0 the export prices will rise

When CA > 0 the interest rates rise

When CA > 0 the home currency appreciates

2.

Mexico's President Nieto is:

A Social Democrat

A Christian Democrat from PRI party

A Socialist

A Christian Democrat from PAN party

3.

Why the local economy does not matter to some countries?

Because the local economy is rural and urban economy is industrial

Because the local economy is low tech and the national economy is high tech

Because the local economy does not rely on low cost imported goods

Because the local economy produces far smaller corporate profits than the operations abroad

When CA < 0 the home currency appreciates

When CA < 0 the export prices will rise

When CA > 0 the interest rates rise

When CA > 0 the home currency appreciates

Explanation / Answer

1. Option D is correct.

When CA>0, implies the current account is in surplus, further implies that exports exceeds the imports, thus appreciating the domestic currency.

2. Option B is correct.

President Enrique Peña Nieto is a roman catholic and a menber of PRI party.

3. Option B is correct.

Local economy is often less developed than the rest of the nation, contributing low skills, low education jobs to the nation.