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Question 1 of 10

1. Question

10 points

In a flexible currency exchange rate market, values of currencies are determined by:

The demand for and the supply of currencies.
the IMF and the World Bank.
the central banks of the countries in charge of the currencies.
the Federal Reserve

Question 2 of 10

2. Question

10 points

Bitcoins are a relatively new electronic currency. Which of the following is a characteristic of bitcoins?

They are inexpensive and quick to transfer.
They cannot be used in illegal transactions.
The value of Bitcoins relative to the dollar is fixed.
All of the listed choices are characteristic of Bitcoins.

Question 3 of 10

3. Question

10 points

Which of the following changes in demand and supply causes a definite increase in the value of the dollar?

The demand for dollars increases and the supply of dollars decreases.
The demand for dollars increases and the supply of dollars increases.
The demand for dollars decreases and the supply of dollars decreases.
The demand for dollars decreases and the supply of dollars increases.

Question 4 of 10

4. Question

10 points

When the value of a currency increases, the exports of the country that uses this currency become __________, and the imports become ____________.

more expensive; less expensive
less expensive; more expensive
more expensive; more expensive also
less expensive; less expensive also

Question 5 of 10

5. Question

10 points

In a flexible currency exchange rate system, if a currency has lowered in value, we say that it has:

depreciated
appreciated
revaluated
devaluated

Question 6 of 10

6. Question

10 points

If a person in a foreign country receives a financial gift from a person residing in the United States, then this transaction is recorded in the _____________. This account is part of the ______________.

transfer payments account; current account
transfer payments account; capital account
services account; current account
services account; capital account

Question 7 of 10

7. Question

10 points

If a United States businessperson purchases stocks and bonds in another country, this is recorded in the ______________. Once the businessperson receives earnings (dividends, interest, etc.) from these investments, then these earnings are recorded in the ______________.

financial and capital account; current account
current account; financial and capital account
investment account; services account
international stock market account; financial and capital account

Question 8 of 10

8. Question

10 points

Which of the following is true about the Balance of Payments?

All of the listed choices are true statements about the Balance of Payments.
The sum of all seven Balance of Payments accounts is zero.
A country has a trade deficit if the first of the seven accounts (the merchandise trade account) is negative even if all the other accounts are positive.
A trade deficit can be a sign of strong and healthy economy.

Question 9 of 10

9. Question

10 points

According to our text, which of the following is an important characteristic of international trade?

International trade and economic inter-dependency strengthens political ties between countries and reduces the risk of military conflict.
International trade and economic inter-dependency weakens political ties between countries and increases the risk of military conflict.
International trade often leads to trade deficits which always harms a country's economy.
International trade takes away jobs from domestic workers and weakens the economy of a country.

Question 10 of 10

10. Question

10 points

According to our text, boycotting sweatshops in Third World countries:

may hurt the economic development of the Third World country and will likely make the economic problems of the country worse.
is necessary because the conditions in the sweatshops are unacceptable.
is necessary because manufacturing jobs should stay within our own country.
is bad because our country needs to import foreign goods that have low prices in order to keep our inflation rate limited.

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Unit 10