• French importers of U.S. merchandise ____.
• A. demand Euros in return for U.S. dollars
• B. supply Euros in return for U.S. dollars.
• C. demand Japanese yen in return for dollars
• D. supply U.S. dollars in return for Euros
• E. Both (A) and (D)

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Question 2 of 5

1.0 Points

• The current exchange rate between U.S. Dollar and Euro is 0.738/$. It means that _____.
• A. one Dollar can buy 1.355 Euros
• B. one Euro can buy 0.738 Dollars
• C. one Dollar can buy 0.738 Euros
• D. one Euro can buy 1.355 Dollars
• E. Both (C) and (D)

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Question 3 of 5

1.0 Points

• If the exchange rate between the British Pound (GBP) and the Euro (EUR) changes from 0.795 GBP to 0.78 GBP per EUR, _____.
• A. the pound has appreciated against the euro
• B. the euro has depreciated against the pound
• C. the euro has appreciated against the pound
• D. both (A) and (B)

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Question 4 of 5

1.0 Points

• Exchange rates are NOT directly influenced by _____
• A. trade flows.
• B. financial flows.
• C. government intervention.
• D. unemployment rates
• E. Exchange rates are influenced by all of the above.

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Question 5 of 5

1.0 Points

• According to the purchasing power parity, if the rate of inflation in the U.K. is twice the rate in the U.S., _____.
• A. the United States should experience balance of payments problems in the future
• B. U.S. imports from Britain should increase significantly
• C. the dollar should appreciate against the pound
• D. the dollar should depreciate against the pound
• E. UK interest rates should be below US rates