You can click on the following link to download the problem set for this module: Exchange Rates and International Finance Problem Set.
Exchange Rates and International Finance Problem Set[1]
- Suppose that the US imports $260 million worth of goods and services and exports $160 million worth of goods and services.
What is the value of net exports?
- Suppose that the US imports $260 million worth of goods and services and exports $160 million worth of goods and services.
As a result the US has a:- trade deficit.
- balanced trade account.
- trade surplus.
- Other things the same, if the exchange rate changes from 2.3 Dinar per dollar to 7.6 Dinar per dollar, the dollar has
- appreciated and buys more foreign goods.
- depreciated and buys fewer foreign goods.
- appreciated and buys fewer foreign goods.
- depreciated and buys more foreign goods.
- Other things the same, if the exchange rate changes from 7.6 Dinar per dollar to 2.3 Dinar per dollar, the dollar has
- appreciated and buys more foreign goods.
- depreciated and buys fewer foreign goods.
- appreciated and buys fewer foreign goods.
- depreciated and buys more foreign goods.
- A depreciation of the U.S. exchange rate induces U.S. consumers to buy
- fewer domestic goods and fewer foreign goods.
- more domestic goods and more foreign goods.
- more domestic goods and fewer foreign goods.
- fewer domestic goods and more foreign goods.
- Other things the same, if the exchange rate changes from 2.3 Dinar per dollar to 7.6 Dinar per dollar, then the dollar
- depreciates which causes US net exports to increase.
- appreciates, which causes US net exports to decrease.
- depreciates which causes US net exports to decrease.
- appreciates which causes US net exports to increase.
- Other things the same, if the exchange rate changes from 7.6 Dinar per dollar to 2.3 Dinar per dollar, then the dollar
- depreciates, which causes AD to shift right.
- appreciates, which causes AD to shift left.
- depreciates, which causes AD to shift left.
- appreciates which causes AD to shift right.
- Other things the same, if the exchange rate changes from 2.3 Dinar per dollar to 7.6 Dinar per dollar, then as a result
- AD shifts right.
- AD is unaffected.
- AD shifts left.
- Other things the same, if the exchange rate changes from 7.6 Dinar per dollar to 2.3 Dinar per dollar, then as a result
- AD shifts right.
- AD is unaffected.
- AD shifts left.
[1] This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator.