AnswersMI-Economics CRIntroduction to Economics

Currencies and Exchange Rates Answers

0 verified answers2 views
1
Free Preview

What is an example of a country that makes use of another nation’s currency?

A
France
B
Germany
C
Panama
D
Mexico
2
Free Preview

The best time for Americans to import French cheese is when they can

A
exchange a combination of goods and US dollars for euros.
B
buy the most euros for US dollars.
C
buy the most US dollars for euros.
D
exchange US dollars for pesos and then for euros.
3

It’s important for countries to exchange currencies so that goods from other nations can be

A
manufactured.
B
destroyed.
C
traded.
D
regulated.
4

Each currency has a changing value relative to other currencies. This is referred to as a currency's _______.

A
exchange rate
B
currency value
C
exchange value
D
currency rate
5

Read this news report about a planned devaluation of the bolivar, the currency of Venezuela.The president of Venezuela announced that the country would be devaluating the bolivar for the fifth time in nine years. The official rate is falling from 4.3 bolivars to the dollar, to 6.3, a 32% devaluation. By increasing the bolivar value of exports of oil to the US and other nations, the government hopes to alleviate a budget crisis caused by its increasing reliance on borrowing to meet spending obligations.In response to the announcement, the people of Venezuela lined up today to buy televisions, electronics, and airline tickets in order to protect themselves from projected price increases.

A
followed the law of supply and demand.
B
allowed the exchange rate to remain unchanged.
C
increased the number of bolivars needed to buy one dollar.
D
decreased the number of bolivars needed to buy one dollar.
6

Which factor plays a role in establishing the value of a country’s currency?

A
the attractiveness of the currency design
B
the location of the country
C
supply and demand
D
distance between countries
7

Which of these factors would strengthen demand for a nation’s currency on the international market? Select all that apply.

A
high domestic inflation
B
stability of government
C
victory in war
D
high gross domestic product
E
defeat in war
F
low unemployment rates
8

Which of these statements most accurately describes currencies in North America?

A
All countries in North America use the US dollar.
B
All countries in North America use the euro.
C
North American countries have done away with separate currencies.
D
Each country in North America uses its own currency.
10

Who decides which currency each country in the world uses?

A
the United Nations
B
each individual country
C
the European Union
D
the United States

Did you find these answers helpful?

Currencies and Exchange Rates Answers…