(C) revaluation d. devaluation 6. Assume that the Japanese government relaxes its controls on imports by Japanese companies, so Japanese companies import more from other enantries. Other things being equal, supply of yen in the foreign exchange market should , and the value of yen should a. increase; increase b. decrease; decrease c. increase; decrease d. decrease, increase 7. Which of the following is NOT a required convergence criterion to become a full member of the euro zone? a. The fiscal deficit should be no more than 3% of GDP. b. Nominal inflation should be no more than 1.5% above the average inflation rate for the three members with the lowest inflation rates in the previous year. c. GDP growth rate must be at 2.0% or higher. d. Government debt should be no more than 60% of GDP. 8. A London-based insurance company buys U.S. corporate bonds for its investment portfolio. It will be recorded on the U.S. balance of payments as a item under of the financial account. a. debit; portfolio investment b. credit; portfolio investment c. credit; direct investment d. debit; direct investment 9. Under an international regime of floating exchange rates, countries with an overall BOP will have a (an) currency while countries with an overall BOP will have a (an) currency. a. deficit, appreciating; surplus, appreciating b. surplus, depreciating; deficit, appreciating c. deficit, depreciating; surplus, depreciating d. surplus, appreciating; deficit, depreciafing 10. are the players that purchase and sell currencies to make a profit from bid-ask spread. a. Dealers b. Central banks (c.) Brokers d. Arbitragers