33) The government just released international exchange rate statistics and reported that the real effective exchange rate index for the U.S. dollar vs. the Japanese yen decreased from 105 last year to 95 currently and is expected to fall still further in the coming year. Other things equal, U.S. ________ to/from Japan think this is good news, and U.S. ________ to/from Japan think this is bad news.

A) importers; exporters

B) importers; importers

C) exporters; exporters

D) exporters; importers

34) Phillips NV produces DVD players and exports them to the United States. Last year the exchange rate was $1.25/euro and Phillips charged 120 euro per player in Euroland and $150 per DVD player in the United States. Currently the spot exchange rate is $1.45/euro and Phillips is charging $160 per DVD player. What is the degree of pass through by Phillips NV on their DVD players?

A) 92%

B) 33.3%

C) 41.7%

D) 4.1%

35) Jaguar has full manufacturing costs of their S-type sedan of 22,803. They sell the S-type in the UK with a 20% margin for a price of 27,363. Today these cars are available in the U.S. for $55,000 which is the UK price multiplied by the current exchange rate of $2.01/. Jaguar has committed to keeping the U.S. price at $55,000 for the next six months. If the UK pound appreciates against the USD to an exchange rate of $2.15/, and Jaguar has not hedged against currency changes, what is the amount the company will receive in pounds at the new exchange rate?

A) 22,803

B) 25,581

C) 27,363

D) 55,000

36) Which of the following did NOT contribute to the exchange rate collapse in emerging markets in the 1990s?

A) infrastructure weaknesses

B) speculation on the part of market participants

C) the sharp reduction of cross-border foreign direct investment

D) All of the above contributed to the emerging markets exchange rate collapse of the 1990s.