Sample Questions
 

 

1. An appreciation of the Rupee relative to the US Dollar would be expected to have which of the following effects?

A. Increase US exports to India

B. Increase US imports from India

C. Raise the cost to Americans for Indian imports

D. Create Balance of Payments surplus for India

2. Which of the systems occurred first in the history of international banking ?

A. Post Bretton Woods

B. European Monetary Union

C. Gold Standard

D. Gold Exchange Standard

3. When Americans or foreigners expect the return on _____ deposits to be high relative to the return on _____ deposits, there is a higher demand for dollar deposits and a correspondingly lower demand for foreign deposits.

A. dollar; dollar

B. dollar; foreign

C. foreign; dollar

D. foreign; foreign

4. If the French demand for American exports rises at the same time that U.S. productivity rises relative to French productivity, then, in the long run,

A. the euro should appreciate relative to the dollar

B. the dollar should depreciate relative to the euro

C. the dollar should appreciate relative to the euro

D. it is not clear whether the euro should appreciate or depreciate relative to the dollar.

5. If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid in

A. Dollars

B. Chinese Yuan

C. Euros or some third currency

D. International monetary credits

Answer: 1 (C), 2 (C), 3 (B), 4 (C), 5 (B)