An appreciation in the exchange rate makes a country's exports more expensive.Question 10Answera.Trueb.False

An increase in the U.S. dollar exchange rate means foreigners must payQuestion 17Answera.more for dollars and more for U.S. exports.b.less for dollars and more for U.S. imports.c.more for dollars and less for U.S. exports.d.less for dollars and less for U.S. exports.

Two countries trade with each other regularly. Country A has a strong economy and buys large quantities of natural resources from country B each year. Country B has a weaker economy, and $1 in country A's currency is worth about $50 in country B's currency.Which result would be most likely if the exchange rate suddenly became $1 in country A's money for $75 in country B's money?A.Country B would receive more value for its exported materials.B.Country A would receive more value for its imported materials.C.Country A would be forced to adopt a flexible exchange rate.D.Country B would be forced to adopt a fixed exchange rate.

An exchange rate appreciation will lead to exports becoming    competitive and imports becoming   . Ceteris paribus, this would lead to a worsening of the    balance.

Complete the following statement:An appreciation of a country’s exchange rate will increase the price of    and decrease the price of    causing the terms of trade to   .Submit

An increase in the real exchange rate reflects _______ of the home currency, implying that the home country will have _______.[Hint: see page 19 of lecture 3A, question 4 of In-class Quiz - Week 4B]The CNB gives a brief introductionLinks to an external site. to the terminology regarding nominal vs. real exchange rates.Group of answer choicesa real depreciation; more exports and less importsa real appreciation; more exports and less importsa real appreciation; more imports and less exportsa real depreciation; more imports and less exports