Econ Unit 4 Review

What is an exchange rate?

• How many US dollars you can exchange for RMB at Travelex

• The rate at which goods are exchanged between two countries

• The price of goods in terms of a foreign currency

• The price of one nation's currency in terms of another's

If the US $ were to appreciate in relation to the Euro, what effect would this have?

• US consumers can buy more European goods and services for more $$$

• European consumers would have more purchasing power in US

• European tourists to the US will spend more $$

• US consumers can buy more English goods and services for fewer $$

If the US is currently experiencing inflation, what will happen to the value of its currency?

• No change

• It will likely appreciate

• It will likely depreciate

What might cause the value of the U.S. dollar to appreciate in relationship to the euro?

• Increased demand for U.S. products in Europe.

• Increases in the U.S. money supply

• Increased demand for European products in the U.S.

• High rates of inflation in the U.S.

One advantage of a weak dollar is that... ?

• American income tax rates go down.

• Imports are cheaper for Americans to buy.

• American exports increase.

• Travel abroad is cheaper for Americans.

What must first take place in order for one country to trade with another?

• Decide what they will trade.

• Agree to export

• Exchange currency for the currency accepted by the trading country.

• Agree in import

Stacy traveled to Mexico and took $100 in U.S. currency. Based on the given info, she received about how many pesos after currency exchange?

• 10.34 pesos

• 970 pesos

• 1,034 pesos

• 9,700 pesos

What is an exchange rate?

• How many US dollars you can exchange for RMB at Travelex

• The price of one nation's currency in terms of another's

• The rate at which goods are exchanged between two countries

• The price of goods in terms of a foreign currency

What is the value of a nations currency in relation to a foreign country?

• Exchange Rate

• Trade Deficit

• Trade Surplus

• Protectionism

You are on a trip to Germany. You swap your dollars for Euros. Why exchange currency?

• Because Euros are a great souvenir.

• Because dollars are worth the same as other currency

• To buy or sell goods in Germany; they won't take dollars.