Q11. The U.S. eliminates high tariffs on major imported goods. Under a system of flexible exchange rates, this would tend to:

A)   cause the dollar to depreciate in value.

B)   cause the dollar to appreciate in value.

C)   decrease the U.S. balance of payments.

Q12. In a flexible exchange rate system, exchange rates are determined by:

A)     the total value of the country's gold reserves.

B)     supply and demand in the currency market.

C)     governmental fiat.

Q13. Under a system of flexible exchange rates, a decrease in the foreign demand for a nation’s currency will cause the nation’s:

A)   currency to depreciate in value.

B)   currency to appreciate in value.

C)   consumer prices to increase, in terms of foreign currencies.

Q14. Depreciation in the value of the U.S. dollar on the foreign exchange market will:

A)     make U.S. exports cheaper to foreigners.

B)     make imports less expensive for U.S. consumers.

C)     cause the U.S. to run a balance of payments surplus in the long run.

答案和详解如下：

Q11. The U.S. eliminates high tariffs on major imported goods. Under a system of flexible exchange rates, this would tend to:

A)   cause the dollar to depreciate in value.

B)   cause the dollar to appreciate in value.

C)   decrease the U.S. balance of payments.

Correct answer is A)

The elimination of tariffs causes imported goods to be cheaper and the demand for imported goods to increase. In order to purchase the goods, Americans will sell dollars to purchase other currencies, thus causing the dollar to depreciate.

Q12. In a flexible exchange rate system, exchange rates are determined by:

A)     the total value of the country's gold reserves.

B)     supply and demand in the currency market.

C)     governmental fiat.

Correct answer is B)

Exchange rates are determined by supply and demand. British importers needing dollars to purchase U.S. goods will buy U.S. dollars and sell British pounds. British exporters needing to convert dollars to pounds will sell dollars and buy pounds.

Q13. Under a system of flexible exchange rates, a decrease in the foreign demand for a nation’s currency will cause the nation’s:

A)   currency to depreciate in value.

B)   currency to appreciate in value.

C)   consumer prices to increase, in terms of foreign currencies.

Correct answer is A)

As foreign demand for a currency decreases, its price decreases and it depreciates.

Q14. Depreciation in the value of the U.S. dollar on the foreign exchange market will:

A)     make U.S. exports cheaper to foreigners.

B)     make imports less expensive for U.S. consumers.

C)     cause the U.S. to run a balance of payments surplus in the long run.

Correct answer is A)

Depreciation of a currency makes a country's goods more attractive to foreign buyers.

Making imports less expensive for U.S. consumers would be true if the dollar was appreciating.

The balance of payments equation should always equal 0.

thanks