Assume that the supply of loanable funds increases in Canada. The international value of Canada’s currency and Canada’s exports will most likely change in which of the following ways

Value of the Canadian Dollar Exports Decrease Increase

Value of the Canadian Dollar Exports Decrease Decrease

Value of the Canadian Dollar Exports Increase Decrease

Value of the Canadian Dollar Exports Increase Increase

Value of the Canadian Dollar Exports Not change Not change

An increase in net exports for country X will most likely be caused by which of the following?

A decrease in the international value of the currency in country X

An increase in consumer spending

An increase in direct foreign investment

An increase in the international value of the currency in country X

An increase in the price level in country X

If the U.S. dollar appreciates relative to the Euro, what is the likely impact on U.S. exports to Europe?

C) U.S. exports will remain unchanged

If the supply of British Pounds increases, what is the likely effect on the value of the Pound?

D) The Pound becomes more valuable

What is the effect on the Canadian dollar if Canada experiences higher inflation than its trading partners?

B) The Canadian dollar depreciates

A) The Canadian dollar appreciates

C) The Canadian dollar remains stable

D) The Canadian dollar becomes more valuable

If the demand for U.S. goods increases in China, what is the likely impact on the U.S. dollar?

C) The U.S. dollar remains stable

D) The U.S. dollar becomes less valuable

What happens to the exchange rate if the supply of Euros decreases?

D) The Euro becomes less valuable

If the U.S. experiences a recession while the Eurozone does not, what is the likely impact on the U.S. dollar?

C) The U.S. dollar remains stable

D) The U.S. dollar becomes more valuable

What is the likely impact on the Mexican Peso if Mexico's interest rates fall relative to the U.S.?

D) The Peso becomes more valuable

If the U.S. dollar depreciates relative to the Canadian dollar, what is the likely impact on U.S. imports from Canada?

C) U.S. imports will remain unchanged

What happens to the exchange rate if the demand for U.S. dollars decreases?

C) The U.S. dollar remains stable

D) The U.S. dollar becomes more valuable

If the supply of Japanese Yen decreases, what is the likely effect on the value of the Yen?

D) The Yen becomes less valuable

What is the effect on the Euro if the Eurozone experiences lower inflation than its trading partners?

D) The Euro becomes less valuable

If the demand for Canadian dollars increases, what is the likely impact on the Canadian dollar?

A) The Canadian dollar appreciates

B) The Canadian dollar depreciates

C) The Canadian dollar remains stable

D) The Canadian dollar becomes less valuable

What happens to the exchange rate if the supply of U.S. dollars increases?

C) The U.S. dollar remains stable

D) The U.S. dollar becomes more valuable

AP Macro Exchange Rates

Authored by John Robinson

Social Studies

12th Grade

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

An increase in Korea’s demand for U.S. goods would cause the US dollar to

Depreciate because of inflation

Depreciate because the U.S. would be selling more dollars to Korea

Depreciate because the U.S. money supply would increase as exports rise

Appreciate because Korea would be buying more U.S. dollars

Appreciate because Korea would be selling more U.S. dollars

MULTIPLE CHOICE QUESTION

1 min • 1 pt

If the demand for the British Pound increases relative to the U.S. dollar, then the

US dollar would appreciate

Supply of US dollars would decrease

Quantity supplied of Pounds would decrease

British pound would appreciate

British pound will depreciate

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Incomes fall in the United States, but not in Japan. Which of the following will occur?

The US dollar will appreciate and the Japanese Yen will depreciate

The US dollar will appreciate and the Japanese Yen will appreciate

US imports from Japan will increase

The US dollar will depreciate and the Japanese Yen will appreciate

Japanese exports to the US will increase

MULTIPLE CHOICE QUESTION

1 min • 1 pt