7. If a country experiences high inflation relative to the U.S., its exports to the U.S. should ____, its imports should ____, and there is ____ pressure on US dollars.

a.	decrease; increase; upward
b.	decrease; decrease; upward
c.	increase; decrease; downward
d.	decrease; increase; downward
e.	increase; decrease; upward

8. The 30-day forward rate for the euro is $1.07, while the current spot rate of the euro is $1.05. What is the annualized forward premium or discount of dollar?

a.	22.4 percent discount.
b.	22.4 percent premium.
c.	22.85 percent premium.
d.	22.85 percent discount.
e.	No Answer

9. To force the value of the pound to depreciate against the dollar, the Federal Reserve should:

a.	sell pound for dollar in the foreign exchange market and the European Central Bank (ECB) should sell pound for dollar in the foreign exchange market.
b.	sell pounds for dollars in the foreign exchange market and the European Central Bank (ECB) should sell dollars for pounds in the foreign exchange market.
c.	sell pounds for dollars in the foreign exchange market and the European Central Bank (ECB) should not intervene.
d.	sell dollars for pounds in the foreign exchange market and the European Central Bank (ECB) should sell pounds for dollars in the foreign exchange market. e. No answer