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7. 4* the h!me $!untry ha# ne(ati)e trade ba"an$e then it# rea" %' i#"e## than rea" d!me#ti$ e,penditure.
10. +he eui"ibrium bu#ine##-$y$"e m!de" predi$t# that the rea" $urrent-a$$!unt ba"an$e i"" be $!unter$y$"i$a".
%*LTPLE C.OCE
1. +he "a !* !ne pri$e:a. pr!hibit# pri$e di#$riminati!n. $. i# a ta, !n imp!rt#.
b. i# that market# !rk t! en#ure that the #ame (!!d ha# the #ame pri$e in a""
"!$ati!n#. d. pr!hibit# pri$e in$rea#e# un"e## *irm# $an #h! their areunu#ua" $ir$um#tan$e#.
2. +he di**eren$e beteen rea" %' in a $"!#ed e$!n!my and rea" %&'in a !pen e$!n!my i#:a. net rea" a##et in$!me *r!m abr!ad. $. net internati!na" in)e#tment
p!#iti!n. b. net imp!rt#. d. the trade ba"an$e.
3. ea" %&' in an !pen e$!n!my i#:a. the $"!#ed e$!n!my rea" !utput "e## net rea" a##et in$!me *r!m abr!ad. $.
the $"!#ed e$!n!my rea" !utput "e## (r!## rea" a##et in$!me *r!m abr!ad. b. the $"!#ed e$!n!my rea" !utput p"u# (r!## rea" a##et in$!me *r!m abr!ad. d.
the $"!#ed e$!n!my rea" !utput p"u# net rea" a##et in$!me *r!m abr!ad.
ba"an$e time# the net rea" a##et in$!me *r!m abr!ad. b. trade ba"an$e p"u# the net rea" a##et in$!me *r!m abr!ad. d. trade ba"an$e "e## the net rea" in$!me *r!m abr!ad.
10. +he rea" $urrent a$$!unt ba"an$e eua"#:
a. net *!rei(n in)e#tment#. $. the trade ba"an$e p"u# net rea" a##etin$!me *r!m abr!ad.
b. rea" %&' "e## rea" d!me#ti$ e,penditure. d. a"" !* the ab!)e.
11. +he rea" $urrent a$$!unt ba"an$e eua"#:a. net *!rei(n in)e#tment#. $. the trade ba"an$e.
b. the net internati!na" in)e#tment p!#iti!n. d. a"" !* the ab!)e.
b. an in$rea#e in h!me $!untry (r!## d!me#ti$ in)e#tment. d. a"" !* theab!)e.
17. 4n the market $"earin( m!de" ith !r"d market# *!r (!!d# and $reditan in$rea#e in te$hn!"!(y in the h!me $!untry $au#e#:a. an in$rea#e in the ?'@. $. an in$rea#e in "endin( t! *!rei(ner#.
b. an de$rea#e in h!me $!untry (r!## d!me#ti$ in)e#tment. d. a"" !* theab!)e.
20. 4n the market $"earin( m!de" ith !r"d market# *!r (!!d# and $redit
an in$rea#e in te$hn!"!(y in the h!me $!untry $au#e#:a. an de$rea#e in the ?'@. $. an in$rea#e in "endin( t! *!rei(ner#.
b. an in$rea#e in h!me $!untry (r!## d!me#ti$ in)e#tment. d. a"" !* theab!)e.
21. 4n the market $"earin( m!de" ith !r"d market# *!r (!!d# and $reditan in$rea#e in te$hn!"!(y in the h!me $!untry $au#e#:a. a de$rea#e in the ?'@. $. an in$rea#e in b!rr!in( *r!m*!rei(ner#.
b. a de$rea#e in (r!## d!me#ti$ in)e#tment. d. a"" !* the ab!)e.
22. 4n the market $"earin( m!de" ith !r"d market# *!r (!!d# and $reditan in$rea#e in te$hn!"!(y in the h!me $!untry $au#e#:a. a "ar(er $urrent a$$!unt de*i$it. $. a "!er ?'@.
b. a #ma""er $urrent a$$!unt de*i$it. d. "!er d!me#ti$ (r!## in)e#tment.
23. 4n the market $"earin( m!de" ith !r"d market# *!r (!!d# and $redita de$rea#e in te$hn!"!(y in the h!me $!untry $au#e#:a. a "ar(er $urrent a$$!unt de*i$it. $. a hi(her ?'@.
b. a #ma""er $urrent a$$!unt de*i$it. d. hi(her d!me#ti$ (r!##in)e#tment.
25. +he !pen e$!n!my eui"ibrium bu#ine##-$y$"e m!de" predi$t# that therea" $urrent a$$!unt ba"an$e i"" be:a. the #ame in e,pan#i!n# and re$e##i!n. $. hi(h in e,pan#i!n# and"! in re$e##i!n#.
b. "! in e,pan#i!n# and hi(h in re$e##i!n#. d. in)ariant ith the bu#ine## $y$"e.
2. 4n AS data the rea" $urrent a$$!unt ba"an$e i#:a. pr!$y$"i$a" hen the m!de" predi$t# it i"" be $!unter$y$"i$a". $.
$!unter$y$"i$a" hen the m!de" predi$t# it i"" be pr!$y$"i$a". b. pr!$y$"i$a" a# the m!de" predi$t#. d. $!unter$y$"i$a" a# the m!de" predi$t#.
2. 4n AS data the rea" $urrent a$$!unt ba"an$e i#:a. pr!$y$"i$a". $. $!unter$y$"i$a".
b. eak"y pr!$y$"i$a". d. eak"y $!unter$y$"i$a".
28. Whi"e a$$!rdin( t! the m!de" the $urrent a$$!unt ba"an$e i"" be$!unter$y$"i$a" the ba"an$e $an a"#! de$"ine due t!:a. a temp!rary ne(ati)e #h!$k "ike a har)e#t *ai"ure. $. a temp!rary
in$rea#e in (!)ernment pur$ha#e# a# in ar time. b. a "e## de)e"!ped $!untry ha)in( a "! $apita" #t!$k. d. a"" !* theab!)e.
27. Whi"e a$$!rdin( t! the m!de" the $urrent a$$!unt ba"an$e i"" be$!unter$y$"i$a" the ba"an$e $an a"#! de$"ine due t!:a. a temp!rary ne(ati)e #h!$k "ike a har)e#t *ai"ure. $. a permanentde$rea#e in (!)ernment pur$ha#e#.
b. a "e## de)e"!ped $!untry ha)in( p!!r in#tituti!n# *!r (r!th. d. a""!* the ab!)e.
b. the rea" $urrent a$$!unt ba"an$e *a""#. d. a"" !* the ab!)e.
51. 4* e !b#er)e that the pri$e !* a (!!d i# hi(her in !ne "!$ati!n than inan!ther "!$ati!n thi# !b#er)ati!na. )i!"ate# the "a !* !ne pri$e. $. )i!"ate# the "a !* !ne %'.
b. )a"idate# the "a !* !ne pri$e.d. )a"idate# the "a !* !ne %'.
52. 6!rei(n dire$t in)e#tment i#a. the h!me $!untry# additi!na" #upp"y !* "ab!r t! the re#t !* the !r"d. $.
the h!me $!untry# additi!na" demand *!r "ab!r *r!m the re#t !* the !r"d. b. the h!me $!untry# additi!na" !ner#hip !* $apita" in the re#t !* the !r"d.d.
the *!rei(n $!untry# additi!na" demand *!r "ab!r in the h!me $!untry.
53. When the h!me $!untry a$uire# additi!na" !ner#hip !* $apita""!$ated in the re#t !* the !r"d it ha# i#a. redu$ed *!rei(n indire$t in)e#tment. $. a$uired *!rei(n dire$tin)e#tment.
b. a$uired *!rei(n di)e#ted in)e#tment. d. redu$ed *!rei(n dire$tinter)enti!n.
5. ea" (r!## nati!na" pr!du$t in an !pen e$!n!my in$"ude#a. rea" %'. $. net rea" "ab!r $!#t# *r!m abr!ad.
b. net rea" a##et in$!me *r!m abr!ad. d. ;a< and ;b<.
55. 4* the h!me $!untry ha# a rea" %&' hi$h i# (reater than rea" d!me#ti$e,penditure then the h!me $!untry ha#a. a $urrent-a$$!unt #up"u#. $. ba"an$e !n the $urrent a$$!unt.
b. a $urrent-a$$!unt de*i$it. d. n!ne !* the ab!)e.
5. 4* the h!me $!untry ha# a rea" %&' hi$h i# "e## than rea" d!me#ti$e,penditure then the h!me $!untry ha#a. a $urrent-a$$!unt #up"u#. $. ba"an$e !n the $urrent a$$!unt.
b. a $urrent-a$$!unt de*i$it. d. n!ne !* the ab!)e.
5. 4* the h!me $!untry ha# a rea" %&' hi$h i# eua" t! rea" d!me#ti$e,penditure then the h!me $!untry ha#a. a $urrent-a$$!unt #up"u#. $. ba"an$e !n the $urrent a$$!unt.
b. a $urrent-a$$!unt de*i$it. d. n!ne !* the ab!)e.
58. 4* the h!me $!untry ha# a rea" %&' hi$h i# (reater than net *!rei(nin)e#tment then the h!me $!untry ha#a. a $urrent-a$$!unt #up"u#. $. ba"an$e !n the $urrent a$$!unt.
b. a $urrent-a$$!unt de*i$it. d. n!ne !* the ab!)e.
57. 4* the h!me $!untry ha# a rea" %' hi$h i# (reater than rea" d!me#ti$e,penditure then the h!me $!untry ha#a. a trade ba"an$e that i# p!#iti)e. $. a trade ba"an$e that i# zer!.
b. a trade ba"an$e that i# ne(ati)e. d. n!ne !* the ab!)e.
0. 4* the h!me $!untry ha# a rea" %' hi$h i# "e## than rea" d!me#ti$e,penditure then the h!me $!untry ha#
a. a trade ba"an$e that i# p!#iti)e. $. a trade ba"an$e that i# zer!. b. a trade ba"an$e that i# ne(ati)e. d. n!ne !* the ab!)e.
1. Di#t!ri$a" data !n the A.S. $urrent a$$!unt ba"an$e #h!a. a de*i$it *r!m the turn !* the tentieth $entury thr!u(h the mid-170#. $.
a #urp"u# *!r the tentieth $entury thr!u(h the mid-170#. b. a #urp"u# in m!#t !* the pa#t t! de$ade#. d. a zer! $urrent a$$!unt ba"an$e *!r m!#t !* the tentieth $entury.
2. Di#t!ri$a" data !n the A.S. $urrent a$$!unt ba"an$e #h! that !ne !*
the "ar(e#t rati!# *!r the $urrent-a$$!unt ba"an$e re"ati)e t! %' !$$urreda. a# a #urp"u# in the ear"y 170#. $. a# a #urp"u# in the ear"y 2000#.
b. a# a de*i$it in the ear"y 1770#. d. a# a de*i$it in the ear"y 2000#.
3. Di#t!ri$a" data !n the rati! !* A.S. n!mina" e,p!rt# and imp!rt# t!%' #h!a. a (enera""y ri#in( rati! #in$e 1750. $. a (enera""y p!#iti)e but #teadyrati! #in$e 1750.
b. a (enera""y *a""in( rati! #in$e 1750. d. a rati! h!)erin( ar!und zer!#in$e 1750.
. Di#t!ri$a" data !n the rati! !* A.S. net internati!na" in)e#tment t! %'#h!a. a #teady in$rea#e in the rati! #in$e 1780. $. a #teady rati! #in$e 1780.
b. a #teady de$"ine in the rati! #in$e 1780. d. n! di#$ernab"e pattern in
the rati! #in$e 1780.
5. Di#t!ri$a" data !n the rati! !* A.S. net *a$t!r in$!me *r!m abr!ad t!%' #h!a. a #teady in$rea#e in the rati! #in$e 1780. $. a peak in the rati! ar!und1780 *!""!ed by a de$"ine thr!u(h 178.
b. a #teady de$"ine in the rati! #in$e 170. d. n! di#$ernab"e pattern inthe rati! #in$e 1780.
. de)e"!pin( $!untry ith (!!d pr!#pe$t# mean# that the $!untry#$urrent-a$$!unt ba"an$e !u"d "ike"y bea. ne(ati)e. $. zer!.
b. p!#iti)e. d. imp!##ib"e t! determine.
S.O)T !/SWE)
1. What i# the rea" $urrent a$$!unt ba"an$e
2. What are the e**e$t# !* a permanent in$rea#e in te$hn!"!(y in the !penmarket $"earin( m!de"
3. What d!e# the !pen market $"earin( m!de" predi$t ab!ut thea##!$iati!n !* the rea" $urrent a$$!unt ba"an$e and rea" %' (r!th and hat d! thedata !n the AS #h!
. !e# a (!)ernment bud(et de*i$it "ead t! a rea" $urrent-a$$!untde*i$it
5. What are the e**e$t# !* redu$in( tari**# and u!ta# in the !pen market$"earin( m!de"
Cha&ter 1(
T)*E+,!LSE
1. 4* the d!""ar per yen e,$han(e rate ri#e# then #! d!e# the )a"ue !* thed!""ar.
2. When ab#!"ute pur$ha#in( p!er parity h!"d# the rea" e,$han(e rate i#1.
10. +he $!mbinati!n !* intere#t rate parity and re"ati)e pur$ha#in( p!er parity imp"ie# that e,pe$ted rea" in$!me# are the #ame in the h!me $!untry and the
*!rei(n $!untry.
%*LTPLE C.OCE
1. +he n!mina" e,$han(e rate i#:a. *!rei(n (!!d per h!me (!!d. $. the number !* unit# !* *!rei(n $urren$y
b. the number !* unit# !* *!rei(n $urren$y per !ne unit !* h!me $urren$y di)ided by the rati! !* the *!rei(n pri$e "e)e" t! the h!me pri$e "e)e". d. a"" !* theab!)e.
2. +he rea" e,$han(e rate i#:a. *!rei(n (!!d per h!me (!!d. $. the number !* unit# !* *!rei(n $urren$y
per !ne unit !* the h!me $urren$y. b. n!mina" e,$han(e rate di)ided by the rati! !* the *!rei(n pri$e "e)e" t! theh!me pri$e "e)e". d. a"" !* the ab!)e.
3. 6"e,ib"e e,$han(e rate# are determined by:a. the market. $. the A&.
b. the h!me $!untry (!)ernment. d. the 4nternati!na" ?!netary 6und.
. 6i,ed e,$han(e rate# are determined by:a. the market. $. the A&.
b. the (!)ernment# !* the t! $!untrie#. d. the 4nternati!na"?!netary 6und.
5. 'ur$ha#in( p!er parity i# the idea that:a. the n!mina" e,$han(e eua"# the rati! !* the *!rei(n pri$e t! the h!me pri$e.
$. the n!mina" e,$han(e eua"# the h!me pri$e "e## the *!rei(n pri$e. b. the n!mina" e,$han(e rate eua"# the *!rei(n pri$e time the h!me pri$e. d.
the n!mina" e,$han(e eua"# the h!me pri$e "e## the *!rei(n pri$e.
. 'ur$ha#in( p!er parity may n!t h!"d due t!:a. in*"ati!n. $. market $"earin(.
b. n!ntraded (!!d# #u$h a# #er)i$e#. d. a"" !* the ab!)e.
. 'ur$ha#in( p!er parity may n!t h!"d due t!:
a. in*"ati!n. $. #hi*t# in the term# !* trade. b. market $"earin(. d. a"" !* the ab!)e.
a. the uantity !* (!!d# that $an be b!u(ht in the h!me $!untry eua"# theuantity !* (!!d that $an be b!u(ht in the *!rei(n $!untry. $. the n!mina"e,$han(e rate i# the rati! !* the *!rei(n pri$e t! the h!me pri$e.
b. buyin( and #e""in( (!!d# "!!k# eua""y attra$ti)e in b!th $!untrie#. d.a"" !* the ab!)e.
7. b#!"ute pur$ha#in( p!er parity mean#:a. the uantity !* (!!d# that $an be b!u(ht in the h!me $!untry eua"# the
uantity !* (!!d that $an be b!u(ht in the *!rei(n $!untry. $. the n!mina"e,$han(e rate i# the rati! !* the h!me pri$e t! the !r"d pri$e.
b. buyin( and #e""in( (!!d# "!!k# m!re attra$ti)e in the h!me $!untry. d.a"" !* the ab!)e.
10. b#!"ute pur$ha#in( p!er parity mean#:a. the uantity !* (!!d# that $an be b!u(ht in the h!me $!untry i# (reater thanthe uantity !* (!!d# that $an be b!u(ht in the *!rei(n $!untry. $. then!mina" e,$han(e rate i# the rati! !* the *!rei(n pri$e t! the !r"d pri$e.
b. buyin( and #e""in( (!!d# "!!k# eua""y attra$ti)e in b!th $!untrie#. d.a"" !* the ab!)e.
11. b#!"ute"y pur$ha#in( p!er parity mean#:a. the uantity !* (!!d# that $an be b!u(ht in the h!me $!untry i# (reater thanthe uantity !* (!!d# that $an be b!u(ht in the *!rei(n $!untry. $. the
n!mina" e,$han(e rate i# the rati! !* the *!rei(n pri$e t! the h!me pri$e. b. buyin( and #e""in( (!!d# "!!k# m!re attra$ti)e in the h!me $!untry. d.a"" !* the ab!)e.
1. e"ati)e pur$ha#in( p!er parity #ay# that:a. the (r!th rate !* the n!mina" e,$han(e rate i# the *!rei(n in*"ati!n rate "e##the h!me in*"ati!n rate. $. the (r!th rate !* the n!mina" e,$han(e rate i#the h!me in*"ati!n rate p"u# the *!rei(n in*"ati!n rate.
b. the (r!th rate !* the n!mina" e,$han(e rate i# the *!rei(n in*"ati!n rate time#the h!me in*"ati!n rate. d. the (r!th rate !* the n!mina" e,$han(e rate i#the *!rei(n in*"ati!n rate di)ided by the h!me in*"ati!n rate.
15. e"ati)e pur$ha#in( p!er parity imp"ie# a $!untry i"" #ee it#$urren$y *a"" in )a"ue i*a. it# in*"ati!n rate i# "!er than the *!rei(n in*"ati!n rate. $. it# in*"ati!nrate i# hi(her than the *!rei(n in*"ati!n rate.
b. it# pri$e "e)e" i# hi(her than the *!rei(n pri$e "e)e". d. it# pri$e "e)e" i#"!er than the *!rei(n pri$e "e)e".
1. e"ati)e pur$ha#in( p!er parity imp"ie# a $!untry i"" #ee it#$urren$y ri#e in )a"ue i*a. it# in*"ati!n rate i# "!er than the *!rei(n in*"ati!n rate. $. it# in*"ati!nrate i# hi(her than the *!rei(n in*"ati!n rate.
b. it# pri$e "e)e" i# hi(her than the *!rei(n pri$e "e)e". d. it# pri$e "e)e" i#"!er than the *!rei(n pri$e "e)e".
1. e"ati)e pur$ha#in( p!er parity imp"ie# a $!untry i"" #ee it#$urren$y keep the #ame )a"ue i*a. it# in*"ati!n rate i# "!er than the *!rei(n in*"ati!n rate. $. it# in*"ati!nrate i# eua" t! the *!rei(n in*"ati!n rate.
b. it# pri$e "e)e" i# hi(her than the *!rei(n pri$e "e)e". d. it# pri$e "e)e" i#eua" t! the *!rei(n pri$e "e)e".
18. 4* the h!me in*"ati!n rate i# 5F and the *!rei(n in*"ati!n rate i# 7Fthen by re"ati)e pur$ha#in( p!er parity the h!me $!untry !u"d e,pe$t i# e,$han(erate t!:a. ri#e in )a"ue by 5F. $. ri#e )a"ue by F.
b. *a"" in )a"ue by 5F. d. *a"" in )a"ue by F.
17. 4* the h!me in*"ati!n rate i# 7F and the *!rei(n in*"ati!n rate i# 5Fthen by re"ati)e pur$ha#in( p!er parity the h!me $!untry !u"d e,pe$t i# e,$han(erate t!:a. ri#e in )a"ue by 5F. $. ri#e )a"ue by F.
b. *a"" in )a"ue by 5F. d. *a"" in )a"ue by F.
20. 4* the h!me in*"ati!n rate i# 5F and the *!rei(n in*"ati!n rate i# 5Fthen by re"ati)e pur$ha#in( p!er parity the h!me $!untry !u"d e,pe$t i# e,$han(erate t!:a. ri#e in )a"ue by 5F. $. ha)e n! $han(e in it# )a"ue.
b. *a"" in )a"ue by 5F. d. *a"" in )a"ue by 10F.
21. 4ntere#t rate parity #ay# that:a. the intere#t rate di**erentia" i# the (r!th rate !* the n!mina" e,$han(e rate.
$. the intere#t rate di**erentia" i# the (r!th rate !* the rea" e,$han(e rate. b. the intere#t rate di**erentia" i# rati! !* the *!rei(n pri$e "e)e" t! the h!me pri$e"e)e". d. the intere#t rate di**erentia" i# rati! !* the h!me pri$e "e)e" t! the*!rei(n pri$e "e)e".
22. 4* the h!me intere#t rate i# 5F and the *!rei(n intere#t rate i# F thenthe e,pe$ted (r!th !* the n!mina" e,$han(e rate i#:a. 2F. $. -2F.
b. 5F. d. -12F.
23. 4* the h!me intere#t rate i# 5F and the *!rei(n intere#t rate i# F thenthe di**eren$e in the e,pe$ted in*"ati!n rate# i#:a. 2F. $. -2F.
a. a""!# it# $urren$y# )a"ue t! *"!at. $. "!er# the *i,ed )a"ue !* it#$urren$y.
b. rai#e# the *i,ed )a"ue !* it# $urren$y. d. a""!# it# $urren$y )a"ue t! be #et by the market.
3. depre$iati!n i# hen the )a"ue !* a $!untry# $urren$y:a. i# *i,ed by the (!)ernment. $. *a""# in )a"ue in the e,$han(e market.
b. ri#e# in )a"ue in the e,$han(e market. d. i# *i,ed in re"ati!n#hip t!(!"d.
3. n appre$iati!n i# hen the )a"ue !* a $!untry# $urren$y:a. i# *i,ed by the (!)ernment. $. *a""# in )a"ue in the e,$han(e market.
b. ri#e# in )a"ue in the e,$han(e market. d. i# *i,ed in re"ati!n#hip t!(!"d.
38. Ander a *i,ed e,$han(e rate re(ime "!##e# !* internati!na" re#er)e#imp"y that:a. the pre##ure !n a $!untry that need# t! de)a"ue it $urren$y i# (reater. $.
$!untrie# are n!t under mu$h pre##ure t! $han(e the )a"ue !* their $urren$y. b. the pre##ure !n a $!untry that need# t! re)a"ue it# $urren$y i# (reater. d.
$!untrie# $an n!t $han(e the )a"ue !* their $urren$ie#.
$. (i)e d!me#ti$ m!netary p!"i$y !**i$ia"# m!re aut!n!my. b. make m!netary p!"i$y independent beteen the $!untrie# *i,in( theire,$han(e rate. d. a"" !* the ab!)e.
a. m!ney #upp"y i# *i,ed. $. m!netary p!"i$y maker# are n!tindependent.
b. in*"ati!n rate i# *i,ed. d. a"" !* the ab!)e.
8. Ander *i,ed e,$han(e rate# a $!untry#:a. m!ney #upp"y i# *i,ed. $. m!netary p!"i$y maker# are independent.
b. in*"ati!n rate i"" ri#e. d. a"" !* the ab!)e.
7. Ander *i,ed e,$han(e rate# a $!untry#:a. m!ney #upp"y i# d!me#ti$a""y $!ntr!""ed. $. m!netary p!"i$y maker#are independent.
b. in*"ati!n rate i# *i,ed. d. a"" !* the ab!)e.
50. Ander *i,ed e,$han(e rate# a $!untry#:a. m!ney #upp"y i# d!me#ti$a""y $!ntr!""ed. $. m!netary p!"i$y maker#are n!t independent.
b. in*"ati!n rate i"" ri#e. d. a"" !* the ab!)e.
51. Supp!#e the e,$han(e rate beteen the A.S. d!""ar and the r(entinian pe#! i# 3 pe#!# per d!""ar t!day. 4t ri#e# t! 3.1 pe#!# per d!""ar the ne,t day. +hi#
mean# the d!""ar ha#a. appre$iated and the pe#! ha# depre$iated. $. appre$iated and the pe#!ha# appre$iated.
b. depre$iated and the pe#! ha# appre$iated. d. depre$iated and the pe#!ha# depre$iated.
52. 4n 1750 !ne A.S. d!""ar b!u(ht 31 Gapane#e yen and in 200 !neA.S. d!""ar b!u(ht 11 yen. +he A.S. d!""ar
a. (ained !)er ha"* !* it# )a"ue in term# !* yen. $. appre$iated re"ati)e t! theyen.
b. "!#t !)er ha"* !* it# )a"ue in term# !* yen. d. appre$iated re"ati)e t!m!#t !* the !r"d# $urren$ie#.
53. 4* a $!untry# (!)ernment inter)ene# !*ten in the e,$han(e rate marketthen the $!untrya. i# !peratin( $"!#er t! a *"e,ib"e e,$han(e-rate m!de" than a *i,ed e,$han(e-rate m!de". $. i# !peratin( $"!#er t! a *i,ed e,$han(e-rate m!de" than a*"e,ib"e e,$han(e-rate m!de".
b. i"" e,perien$e repeated appre$iati!n# !* it# $urren$y. d. i# n!t amember !* the 4nternati!na" ?!netary 6und ;4?6<.
5. t a #imp"i*ied "e)e" pur$ha#in( p!er parity make# #en#e be$au#e i*it did n!t h!u#e*h!"d# !u"da. ant t! pur$ha#e a"" !* their (!!d# in !ne p"a$e the m!re e,pen#i)e $!untry.
$. n!t ant t! pur$ha#e any (!!d# *r!m either $!untry. b. ant t! pur$ha#e eua" p!rti!n# !* their (!!d# in ea$h $!untry. d.
ant t! pur$ha#e a"" !* their (!!d# in !ne p"a$e the $heaper $!untry.
55. +he rea" e,$han(e rate i# mea#ured in unit# !* a. (!!d# b!u(ht in the *!rei(n $!untry re"ati)e t! (!!d# b!u(ht in the h!me$!untry. $. "ab!r #upp"y in the *!rei(n $!untry re"ati)e t! "ab!r #upp"y inthe h!me $!untry.
b. pri$e# in the *!rei(n $!untry re"ati)e t! pri$e# in the h!me $!untry. d.n!ne !* the ab!)e.
5. 4* y!u $an buy !ne p!und !* *"!ur *!r B1.25 in the A.S. and !ne p!und!* *"!ur *!r 0.5 H ;p!und#< in the A.@. then pur$ha#in( p!er parity imp"ie# thea. rea" e,$han(e rate i# 1.25 H per B. $. n!mina" e,$han(e rate i# 1. H
per B. b. n!mina" e,$han(e rate i# 0. H per B. d. rea" e,$han(e rate i# 0. H per B.
the d!""ar and the d!""ar t! (!"d. b. the *"e,ib"e e,$han(e-rate re(ime intr!du$ed Iu#t a*ter W!r"d War 44 that (a)e6ran$e the maI!r r!"e in #tabi"izin( $urren$ie#. d. the *i,ed e,$han(e-ratere(ime hi$h "inked the A.S. and !ther $urren$ie# t! #i")er.
2. Ander the rett!n W!!d# Sy#tem the A.S. d!""ar a. a# a""!ed t! )ary ar!und a ide band $!mpared t! !ther parti$ipatin($!untrie#. $. a# n!t *i,ed but the A.S. n!mina" intere#t rate a# *i,ed
b. )aried a$$!rdin( t! market $!nditi!n# but the !ther parti$ipatin( $!untrie# didn!t a""! their $urren$ie# t! )ary. d. a# the !n"y parti$ipatin( $urren$y"inked dire$t"y t! (!"d.
3. 4* the $!untry !* C!"!mbia de$ide# t! *i, it# n!mina" e,$han(e rateith the A.S. d!""ar then in the "!n( run it i"" ha)ea. r!u(h"y the #ame in*"ati!n rate a# the A.S. $. r!u(h"y the #ame rea"%' a# the A.S.
b. a hi(her in*"ati!n rate than the in*"ati!n rate *!r the A.S. d. a hi(herrea" %' than the rea" %' in the A.S.
. One rea#!n that a $!untry ith a re$!rd !* hi(h in*"ati!n mi(ht ant t!*i, it# n!mina" e,$han(e rate ith the A.S. d!""ar i# thata. the $!untry i"" in the "!n( run ha)e ab!ut the #ame in*"ati!n rate a# the A.S.
$. the *i,ed e,$han(e-rate i"" a$t a# a m!netary-p!"i$y ru"e hi$h pre)ent# the $!untry *r!m rene(in( !n a p"ed(e !* "! in*"ati!n. b. the *i,ed e,$han(e-rate i"" he"p the $!untry (ain $redibi"ity in *i(htin( hi(hin*"ati!n. d. a"" !* the ab!)e.
anti-$rime "a# the A.S. pa##ed t! pre)ent Jm!ney "aunderin(.K b. the $entra" bank# attempt t! !**#et an initia" inter)enti!n in the e,$han(emarket. d. the pr!$e## the 4nternati!na" ?!netary 6und ;4?6< u#e# t! "endt! a $!untry in need.
. 4n a *i,ed e,$han(e-rate re(ime the m!ney #upp"y i#a. e,!(en!u#. $. end!(en!u#.