the economics of money, banking, and financial markets

591 #

© 2014 Pearson Canada Inc.#

37. 
    

    ____ in the expected future domestic exchange rate causes the demand for domestic
    assets to increase and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A 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

    
    


38. 
    

    ____ in the expected future domestic exchange rate causes the demand for domestic
    assets to shift to the right and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A 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

    
    


39. 
    

    ____ in the expected future domestic exchange rate causes the demand for domestic
    assets to decrease and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A 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

    
    


40. 
    

    ____ in the expected future domestic exchange rate causes the demand for domestic
    assets to shift to the left and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A 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