MCQs of Economics – Exchange-Rate Adjustments And The Balance of

Suppose that U.S dollar depreciates 70 percent against the yen yet Japanese export prices to Americans did not decrease by the full extent of the dollar depreciation. This is best explained by:

Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a:

Economic theory predicts that a currency depreciation will least lead to an improvement in the home country’s trade balance when:

If foreign manufacturing costs and profit margins in response to a depreciation in the U.S dollar the effect of these actions is to:

The shift toward imperfectly competitive markets in domestic and international trade question the concept of:

Given a two country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This results is a (an):

The extent to which a change in the exchange rate leads to changes in import and export prices is known as the:

Complete currency pass through arises when a 10 percent depreciation in the value of the dollar causes U.S

Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports:

If export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency a depreciation of the dollar during the currency contract period

The notion that, following a currency depreciation the balance of trade falls for while before increasing is called a effect

Suppose that the United kingdom devalues the pound if both exports and imports are written in terms of pounds then the united kingdom balance of trade during a currency contract period

The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run

The shorter the ____ pass through period the ____ the desirable BOT effects of evaluation on quantities traded will appear

The balance of trade can only worsen if income ____ relative to absorption

Empirical evidence regarding in the effects of currency depreciation on the balance of trade indicates that:

According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if: