Question

[10] Which of the following would increase the value of the British pound when compared to the U.S. dollar?

A) A decrease in the U.S. demand for pounds.

B) An increase in the U.S. demand for pounds.

C) An increase in the supply of pounds to persons holding U.S. dollars.

D) None of the above.

[10A] When the value of the dollar drops in comparison to other nations' monies:

A) foreign-made products become more expensive to U.S. buyers.

B) U.S.-made products become more expensive to foreign buyers.

C) foreign purchasers are discouraged from investing in U.S. real estate because it becomes relatively more expensive.

D) all of the above.

[10B] A decrease in the dollar price of British pounds would likely lead to:

A) a decrease in U.S. ownership of British assets.

B) an increase in U.S. ownership of British assets.

C) an increase in British ownership of U.S. assets.

D) none of the above.

[10C] An increase in foreign demand for U.S. soybeans would lead to:

A) a decrease in the price of dollars to foreign buyers.

B) an increase in the supply of dollars to foreign buyers.

C) an increase in the demand for dollars by foreign buyers.

D) all of the above.

[10D] A decrease in the U.S. inflation rate relative to inflation rates in other countries would shift the:

A) U.S. demand curve for foreign currency to the left.

B) U.S. demand curve for foreign currency to the right.

C) supply curve for foreign currency to the U.S. to the left.

D) none of the above.

[10E] If the return on investments in Switzerland were to move above the return on investments in the United States, the:

A) dollar price of Swiss francs would increase.

B) dollar price of Swiss francs would decrease.

C) amount of Swiss francs demanded by U.S. investors would decrease.

D) amount of dollars demanded by Swiss investors would increase.

Answer 1

10. Option B. It appreciates demand for pound

10A. Option A. As more dollar needs to be spent

10.B Option A. As they need to pay more to get pounds

10C. Option C. As dollars are needed to buy more

10D. Option A. Increased inflation reduces demand

10E. Option A. As Swiss francs would appreciate