The Plaza Accord was a 1985 agreement among the G-5 nationsFrance, Germany, the United States, the United Kingdom, andJapanto manipulate exchange rates by depreciating the U.S. dollar relative to the Japanese yen and the German Deutsche mark.

To achieve this goal the Fed or Treasury most likely ____ dollars in the Yen-Dollar market and the Bank of Japan most likely ____Yen in theYen-Dollar market

A.

bought; bought

B.

sold; sold

C.

bought; sold

D.

sold; bought

In the summer of 2020 the US Central Bank announced its intention to keep target interest rates near zero through at least 2023, signalling a three-year commitment to expansionary monetary policymaking. Of the choices below, countries maintaining fixed exchange ratesvis-a-vis the dollar would most likely respond by

A.

taxing capital inflows into their economies

B.

taxing capital outflows from their economies

In October 2020 the Trump Administration announced plans to impose tariffs on imports from Vietnam on the grounds that it believes the country to be a currency manipulator. The most likely market impact of these tariffs would be

A.

depreciation of the Dong (Vietnamese currency)

B.

appreciation of the Dong (Vietnamese currency)

In the summer of 2020 the US Central Bank announced its intention to keep target interest rates near zero through at least 2023, signallinga three-year commitment to expansionary monetary policymaking. Of the choices below, this policy announcement (all other things beingequal), would most likely lead toA.

Dollar depreciation

B.

Dollar devaluation

C.

Dollar appreciation

D.

Dollar revaluation

Sudden depreciation of the dollar will most likely lead to

A.

smaller US surpluses on the capital and financial accounts

B.

financial crises for emerging market economies burdened with dollar-denominated debt

C.

reduced demand for commodities traded in dollars on international markets

D.

all of these things

If a country has a current account surplus that it is evidence that it has

A.

capital controls

B.

a high savings rate

C.

tariffs or other trade barriers

D.

manipulated its currency

If a country is trying to maintain a fixed exchange rate with respect to its trading partners, and it finds that its trading partners have lower inflation rates, what will the country likely have to do to maintain the fixed

rate?

Its Central Bank will have to ________ open market bond purchases and/or impose capital controls on capital ________

A.

increase; outflows

B.

increase; inflows

C.

decrease; inflows

D.

decrease; outflows