The Economics of Money, Banking and Financial Markets 13th Global Edition Test bank

C) increasing the tax rate.
D) printing more dollars.
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
26) What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?
Answer:  During a recession, output declines and unemployment increases. Prior to almost every recession in the U.S. the money growth rate has declined, however, not every decline is followed by a recession.
Question Status:  Previous Edition
AACSB:  Reflective Thinking
 
1.4   Why Study International Finance?
 
1) American companies can borrow funds
A) only in U.S. financial markets.
B) only in foreign financial markets.
C) in both U.S. and foreign financial markets.
D) only from the U.S. government.
Answer:  C
Question Status:  Previous Edition
AACSB:  Diverse and Multicultural Work Environments
 
2) The price of one country's currency in terms of another country's currency is called the
A) exchange rate.
B) interest rate.
C) Dow Jones industrial average.
D) prime rate.
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 

 
3) The market where one currency is converted into another currency is called the ________ market.
A) stock
B) bond
C) derivatives
D) foreign exchange
Answer:  D
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
4) Everything else constant, a stronger dollar will mean that
A) vacationing in England becomes more expensive.
B) vacationing in England becomes less expensive.
C) French cheese becomes more expensive.
D) Japanese cars become more expensive.
Answer:  B
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
5) Which of the following is most likely to result from a stronger dollar?
A) U.S. goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them.
B) U.S. goods exported aboard will cost more in foreign countries and so foreigners will buy more of them.
C) U.S. goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them.
D) Americans will purchase fewer foreign goods.
Answer:  C
Question Status:  Previous Edition
AACSB:  Diverse and Multicultural Work Environments
 
6) Everything else held constant, a weaker dollar will likely hurt
A) textile exporters in South Carolina.
B) wheat farmers in Montana that sell domestically.
C) automobile manufacturers in Michigan that use domestically produced inputs.
D) furniture importers in California.
Answer:  D
Question Status:  Previous Edition
AACSB:  Diverse and Multicultural Work Environments
 

 
7) Everything else held constant, a stronger dollar benefits ________ and hurts ________.
A) American businesses; American consumers
B) American businesses; foreign businesses
C) American consumers; American businesses
D) foreign businesses; American consumers
Answer:  C
Question Status:  Previous Edition
AACSB:  Diverse and Multicultural Work Environments
 
8) During the 1980-1985, 1995-2002, 2011-2020 periods, the dollar ________ in value, thereby benefiting American ________.
A) appreciated; consumers
B) appreciated; businesses
C) depreciated; consumers
D) depreciated; businesses
Answer:  A
Question Status:  Revised
AACSB:  Diverse and Multicultural Work Environments
 
9) From 1980 to 1985 the dollar appreciated relative to the British pound. Holding everything else constant, one would expect that, when compared to 1980
A) fewer Britons traveled to the United States in 1985.
B) Britons imported more wine from California in 1985.
C) Americans exported more wheat to England in 1985.
D) more Britons traveled to the United States in 1985.
Answer:  A
Question Status:  Previous Edition
AACSB:  Diverse and Multicultural Work Environments
 
10) When in 1985 a British pound cost approximately $1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker dollar, the same Shetland sweater would have cost
A) less than $130.
B) more than $130.
C) $130, since the exchange rate does not affect the prices that American consumers pay for foreign goods.
D) $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar.