36.When the dollar appreciates relative to the Canadian dollar:

a.Canadian goods become more expensive in the United States.

b.U.S. goods become more expensive in Canada.

c.U.S. residents tend to buy more from Canada, since the United States has a weak currency.

d.the United States sells more goods to Canada.

37.If $1sells for12.75peso,then1pesomust equal to _______________.

a.$12.75

b.two times as much,i.e.2x 12.75=$25.5

c.approximately $0.078

d.$0.50 exactly.

38.Demand for country X's currency, relative to country Y's currency, will increase (shift up and to the right) when

a.Country X offers lower interest rates on its saving bonds compared to country Y's interest rate on its saving bonds.

b.Country X offers higher interest rates on its saving bonds compared to country Y's interest rate on its saving bonds.

c.inflation rate in country X is higher than inflation rate in country Y.

d.all of the above will increase demand for country X's currency.

39.If Americans demand goods produced in Mexico, it leads to a demand for Mexican pesos and a supply of U.S. dollars in the foreign exchange market.

True

False

40.The Fed can decrease money supply by increasing the required reserve ratio.

True

False