Question

5. According to the textbook, which of the following statements is (are) correct?
(x) From 1960 to about 1975 in the United States, net capital outflow was small and sometimes negative and sometimes positive.
(y) Most of the change from 1991 to 2000 in U.S. net capital outflow as a percent of GDP was due to a decrease in U.S. investment
(z) In the U.S. from 2000 to 2006, net capital outflow as a percent of GDP became a larger negative number because of a large trade deficit and a large net capital inflow.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only
6. Which of the following statements is (are) correct?
(x) The nominal exchange rate is the rate at which a person can trade the currency of one country for the currency of another country.
(y) If the nominal exchange rate is 20 Mexican pesos per U.S. dollar, it is also 0.05 U.S dollar per peso.
(z) If the nominal exchange rate is 0.75 euro per U.S. dollar, then a meal that costs 30 euros would cost 40 U.S. dollars.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

7. If the exchange rate changes from 1.20 Canadian dollars per U.S. dollar to 1.32 Canadian dollars per U.S. dollar, then the U.S. dollar
A. has depreciated and so buys fewer Canadian goods and services.
B. has depreciated and so buys more Canadian goods and services.
C. has appreciated and so buys fewer Canadian goods and services.
D. has appreciated and so buys more Canadian goods and services.
E. is unchanged and so buys the same Canadian goods and services

Answer 1

5---c ) (x) and (z) only

6---e  (x) only

7---d has appreciated and so buys more Canadian goods and services.