the economics of money, banking, and financial markets

592 #

© 2014 Pearson Canada Inc.#

41. 
    

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

    
    


42. 
    

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

    
    


43. 
    

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

    
    


44. 
    

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