the economics of money, banking, and financial markets

590 #

© 2014 Pearson Canada Inc.#

33. 
    

    An increase in the expected future domestic exchange rate causes the demand for domestic
    assets to ____ and the domestic currency to ____, everything else held constant.
    A) increase; appreciate
    B) increase; depreciate
    C) decrease; appreciate
    D) decrease; depreciate
    Answer: A
    Diff: 1 Type: MC Page Ref: 480 - 481
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate

    
    


34. 
    

    An increase in the expected future domestic exchange rate causes the demand for domestic
    assets to shift to the ____ and the domestic currency to ____, everything else held
    constant.
    A) right; appreciate
    B) right; depreciate
    C) left; appreciate
    D) left; depreciate
    Answer: A
    Diff: 1 Type: MC Page Ref: 480 - 481
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate

    
    


35. 
    

    A decrease in the expected future domestic exchange rate causes the demand for domestic
    assets to ____ and the domestic currency to ____, everything else held constant.
    A) increase; appreciate
    B) increase; depreciate
    C) decrease; appreciate
    D) decrease; depreciate
    Answer: D
    Diff: 1 Type: MC Page Ref: 480 - 481
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate

    
    


36. 
    

    A decrease in the expected future domestic exchange rate causes the demand for domestic
    assets to shift to the ____ and the domestic currency to ____, everything else held
    constant.
    A) right; appreciate
    B) right; depreciate
    C) left; appreciate
    D) left; depreciate
    Answer: D
    Diff: 1 Type: MC Page Ref: 480 - 481
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate