宏观经济学：理论与政策（第九版）题库 9-CH14-TB

PARTIV:OPENECONOMYMACROECONOMICS

CHAPTER14:EXCHANGERATESANDTHE

INTERNATIONALMONETARYSYSTEM

ADDITIONALQUESTIONS

Questionsand/orProblems:

1.Whatisthemaincostofmaintainingafixedexchangerate?Providetworeasons,then,why

countriesfixtheirexchangerates.

Thecostofmaintainingafixedexchangerateisgivinguptheuseofmonetarypolicytocontrol

domesticinflationand/oroutput.Thebenefitsincludeeliminatingexchangerateinstability,which

shouldencourageandstabilizeinternationaltradeaswellasencouragecapitalflowsanddiscourage

speculation.

2.Whatisamajoradvantageofflexibleexchangerates?

Aflexibleexchangeratesystemwilleliminatetheconflictsthatariseinafixedratesystembetween

internalandexternalbalance.Inaflexibleratesystem,theexchangeratewilladjusttoclearthe

foreignexchangemarket.Monetaryandfiscalpolicycanbeemployedtopursuedomesticgoalsfree

frombalanceofpaymentsconstraints.

3.WhatwasthegoaloftheBrettonWoodsagreement?Whydiditcollapse?

Theinternationalmonetaryagreement9sprimarygoalwastosetupafixedexchangeratesystem

wherethevalueofthedollarwasfixedintermsofgoldandconvertibleintogold,andallother

countriesagreedtofixthepriceoftheircurrencyintermsofthedollar.

Tosustainthesefixedexchangerates,however,allcountrieshadtofollowU.S.monetaryandfiscal

policy.Whentheydidnotduringthe1960s,theU.S.begantorunchronicdeficitswhileother

countriesrefusedtorevaluetheircurrency.ThesituationfinallybecameuntenableandtheU.S.

chosetoletthedollarfloat.

4.Canacentralbankcontroldomesticinterestratesandfixtheirexchangerateatthesametime?

Explain,focusingontheimplicationsfortheuseofstabilizationpolicy.

No.Tofixanexchangerate,acentralbankmuststandreadyatalltimestobuyorselltheircurrency

attheexchangeratetheywishtomaintain.Thisprohibitstheuseofmonetarypolicyfrombeingused

torespondtodomesticeconomicconditions.Thus,fixedexchangeratesprohibittheuseofmonetary

policytostabilizeinflation,output,orinterestrates.

5.Whatimpactdoesanincreaseinthemoneysupplyhaveonacountriesexchangerateinafloating

exchangeratesystem?Provideagraphoftheforeignexchangemarkettoillustrate.

Anincreaseinthemoneysupplyincreasesthesupplyofdollarswhilereducingthedemandfor

dollars.Bothoftheseeffectsputdownwardpressureonthedollar.

6.Assumingthattheeuro-U.S.dollarexchangerateis.9.IfaGermanbuysanAmericanautomobilefor

$30,000,thenwhatwouldtheautomobilecostinEuros?Whatwouldtheautomobilecostifthe

dollardepreciatedby20percent?

27,000Euros.21,600Euros.

7.Explainwhathashappenedtothevalueofthedollarsince1988,payingparticularattentiontowhat

hashappenedsince2001.

Eventhoughthedollarhascontinuedtoshowvolatility,therehasnotbeenanotherdramaticswingin

thevalueofthedollarsince1988.Between1988and1995wasagradualdeclineinthevalueofthe

dollar,withthedollarhittingrecord-postWorldWarIIlowsagainstboththeGermanmarkand

Japaneseyenin1995.Between1996-97thevalueofthedollarrose.Bylate1997,thevalueofthe

dollar,whethermeasuredrelativetotheGermanmark,ormorebroadlybytheweightedaverageof

othercurrencies,wasbacktoits1988level.WhentheEurowasintroducedin1999,itinitially

depreciatedagainstthedollarsignificantly,butsince2001thedollarhasdepreciatedagainsttheeuro,

particularlysince2005.

8.Whatismeantby"statisticaldiscrepancy?Howdoesitrelatetothecurrentaccount,capitalaccount,

andofficialreservetransactions?

"Statisticaldiscrepancy"isatermutilizedintheU.S.balanceofpaymentsaccounts.Sinceall

internationaleconomictransactionsarenotproperlyrecorded,thestatisticaldiscrepancy(orerrors

andomissionterm)istheamountthatmustbeaddedtomakethebalanceofpaymentsbalance.It

mustbetruethatCA+KA+ORT=0,sothestatisticaldiscrepancyistheadditionorsubtractionthat

makesthistrue.

9.Iffiscalpolicywasusedtokeepinterestratesfixedinthefaceofchangesinmonetarypolicy,would

anincreaseinthemoneysupplystillaffecttheexchangerateinaflexibleexchangeratesystem?

Explain.

Evenifinterestratesareconstant,anincreaseinthemoneysupplywillincreasethepriceleveland

increasethesupplyofdollarsintheforeignexchangemarket.Bothoftheseeffectswillput

downwardpressureontheexchangerate.

AdditionalEssayQuestionsand/orProblems:

10.Illustrategraphicallythewayinwhichtheexchangerateisdeterminedinaflexibleexchangerate

system.Nowassumethatanexpansionarymonetarypolicyactionistaken.Illustratetheeffectsthat

thispolicyactionwillhaveontheforeignexchangemarket.

11.TheU.S.dollarhasdepreciatedsharplyagainsttheeurosince2001.Whatexplanationscanyouoffer

forthisdepreciationofthedollar?Providegraphstoillustrate.

12.BrieflydetailhowtheBrettonWoodssystemworked.Ifacountrywasrunningacurrentaccount

deficit,howwoulditpayforit?Doyouseeanypotentiallimitstopermanentlyrunningcurrent

accountdeficits?

13.DiscussthebreakdownoftheBrettonWoodssystem.Whydiditoccur?Whydiditoccurwhenit

occurred?

14.Brieflydescribetoday'sinternationalexchangeratesystem,includinganexplanationofhowforeign

exchangemarkets.

15.True/False/Explain,usingwhatyouknowaboutthebalanceofpayments."TheU.S.notonly

runsalargetradesurpluswithChina,butlendsChinaquiteabitofmoneywhichcouldbe

usedforpurchasingnewinvestmentandcapitalintheU.S.”

Multiple-ChoiceQuestions:

1.Thecurrentaccountinanation'sbalanceofpaymentsaccountsincludes

a.exportsofU.S.computers

b.importsofGermanautomobiles.

c.purchasesofforeignstocks.

d.Bothaandb*

e.Alloftheabove

2.Inasystemofflexibleexchangerates,expansionarymonetarypolicyabroadwouldinduce

a.ariseintheU.S.exchangerate.*

b.afallintheU.S.rateofexchange.

c.abalanceofpaymentssurplusfortheUnitedStates.

d.nochangeinU.S.exchangerates.

3.Withafixedexchangerate,anincreaseinthedomesticpricelevelwill,foraconstantforeignprice

level,

a.increaseexportsanddecreaseimports.

b.makeforeigngoodsrelativelymoreexpensivetoU.S.citizensbutU.S.exportswillberelatively

cheapertoforeignerbuyers.

c.increasebothexportsandimports.

d.makeforeigngoodsrelativelycheapertoU.S.citizensbutU.S.exportswillbemoreexpensiveto

foreignpurchasers.*

4.Whichofthefollowingstatementsis(are)correct?

a.Underafixedexchangeratesystem,potentialconflictsarisebetweenthegoalsofinternalbalance

andexternalbalance.*

b.Withafixedexchangeratesystem,acentralbankhastogiveupcontroloverdomesticinterest

ratesbutretainscontroloverinflation.

c.Countriesmayfindthatexpansionarypolicies,whichmightbedesiredinordertoreducethe

unemploymentrate,mayleadtoincomelevelsthataretoolowtobalancethetradeaccountand

couldleadtobalanceofpaymentssurpluses.

d.Bothaandc

e.Bothbandc

5.OneexplanationforthefallinthevalueoftheU.S.dollarsince2001is

a.themixofantightfiscal/tightmonetarypolicyovertheperiod.

b.therelativeweaknessoftheU.S.economyovertheperiod.*

c.ahigherdegreeofaccommodationofsupplyshocksintheUnitedStatesrelativetoourtrading

partners.

d.thedisintegrationoftheBrettonWoodssystemduringtheseyears.

6.Inasystemofperfectlyflexibleexchangerates,anexpansionaryU.S.monetarypolicywillcause

a.ariseinthevalueofthedollarrelativetoforeigncurrencies.

b.afallinthevalueofthedollarrelativetoforeigncurrencies.*

c.nochangeinthevalueofthedollarrelativetoforeigncurrencies.

d.achangeinthevalueofthedollarrelativetoforeigncurrenciesbutthedirectionofthechangeis

uncertain.

7.Underafixedexchangeratesystem,theexchangerate

a.isequaltoone.

b.fluctuatesasthepriceofgoldfluctuates.

c.isfixedandinterestratesmustvaryinresponsetobalanceofpaymentmovements.*

d.canperiodicallychangeaseconomicconditionschange.

8.TheU.S.dollarexchangeratedescribesthe

a.thedeficit/surplussituationinthebalanceofpayments.

b.thepriceofaforeigncurrencyintermsofdollars.

c.thedeficit/surplussituationinthemerchandisetradebalance.

d.futurechangesinforeignbalanceofpayments.

e.noneoftheabove.*

9.Assumethatthefixedexchangeratesystemof100pesos=1dollarisabovetheequilibrium

exchangerateof90pesos=1dollarinaflexibleexchangeratesystem.Thenthedollarwouldbe

a.undervaluedandthepesowouldbeovervalued.

b.overvaluedandthepesowouldbeundervalued.*

c.revalued.

d.depreciatedandthepesowouldbeappreciated.

10.Capitalinflowsinthebalanceofpaymentsaccountsinclude

a.purchasesoffinancialassetsbyU.S.residents.

b.directinvestmentsinforeigncountries.

c.indirectinvestmentsinforeigncountries.

d.purchasesofU.S.governmentbondsbyforeigners.*

11.Acurrentaccountdeficitinanation*sbalanceofpaymentsaccountsimpliesthat

a.importsareequaltoexports.

b.exportsexceedimports.

c.expendituresaremorethanincome.*

d.incomeismorethanexpenditures.

12.AsupplyofforeignexchangeoccursintheUnitedStateswhen

a.aU.S.citizenwantssellsstockonaEuropeanstockexchange.

b.theUnitedStatesexportssteeltoJapan.

c.UnitedStatescitizenstravelabroad.

d.Alloftheabove*

13.Adeclineintheexchangeratemeansthat

a.thepriceofforeignexchangehasdeclined.

b.foreigncurrencyhasappreciatedwhilethedollarhasdepreciated.

c.foreigncurrencyhasdepreciatedwhilethedollarhasappreciated.

d.eitheraorc*

14.Assumingthattheexchangeraterisesby5percent,hence,thedollarvolumeofexportsrisesby5

percent,thenforeignexchangeearningswould

a.remainconstant.*

b.increaseby5percent.

c.actuallydecreaseby5percent.

d.increaseby10percent.

15.Asystemofexchangeratedeterminationwithnocentralbankinterventionisa

a.fixedexchangeratesystem.

b.flexibleexchangeratesystem.

c.floatingexchangeratesystem.

d.eitheraflexibleorafloatingexchangeratesystem.*

16.Assumethatthefixedexchangeratesystemof1.1euros=1dollarisbelowtheequilibrium

exchangerateof1.3euros=1dollarinaflexibleexchangeratesystem.Then,atthefixed

exchangerate,thedollarwouldbe

a.undervaluedandtheeurowouldbeovervalued.*

b.overvaluedandtheeurowouldbeundervalued.

c.revaluedandtheeurowouldbedevalued.

d.depreciatedandtheeurowouldbeappreciated.

17.Thehighertheexchangerate,the

a.thelowerthedollarcostofimportedgoodsandthehigherthedemandforforeignexchange.

b.higherthedollarcostofimportedgoodsandthelowerthedemandforforeignexchange.*

c.higherboththedollarcostofimportedgoodsandthedemandforforeignexchange.

d.thelowerboththedollarcostofimportedgoodsandthedemandforforeignexchange.

18.TheBrettonWoodssystem

a.establishedfixedparvaluesforcurrenciesintermsofgold.

b.wastobeasystemofadjustablepegstothedollar.*

c.expectedcountrieswithpersistentsurplusestodevaluetheircurrencies.

d.wasaftertheGreatDepressioninordertoendthedownturn.

19.Anadvantageofaflexibleexchangeratesystemrelativetoafixedsystemisthatinaflexiblerate

system

a.currencyspeculationwillbereduced.

b.balanceofpaymentssurplusesanddeficitscanbedealtwithusingfiscalpolicy,notmonetary

policy.

c.inflationwillbeminimizedbythe"disciplineofthebalanceofpayments."

d.thepriceofimportedgoodswillbekeptrelativelylow.

e.noneoftheabove.*

20.Thecurrentinternationalmonetarysystemisbestdescribedasa

a.fixedratesystem.

b.completelyflexibleratesystem.

c.goldstandard.

d.mercantilistsystem.

e.managedfloatingratesystem.*

21.Inasystemofflexibleexchangerates,lowerinflationabroadwouldinduce

a.ariseintheU.S.exchangerate.

b.afallintheU.S.rateofexchange.*

c.abalanceofpaymentsdeficitfortheUnitedStates.

d.nochangeinU.S.exchangerates.

22.Alternativeproposalstochangethecurrentsystemofexchangeratesinclude

a.anewexplicitsystemoffixedexchangerates.

b.adjustabletargetzonesforexchangerates.

c.adirtyfloatratesystem.

d.Bothaandb*

e.Bothbandc

23.TheUnitedStatesbalanceofpaymentsaccounts

a.recordsallearningsfromtheforeignactivitiesofU.S.residents.

b.recordsallexpendituresofU.S.citizens'abroad.

c.recordsallearningsfromtheforeignactivitiesofforeigngovernments.

d.Bothaandb*

e.Alloftheabove

24.TheofficialreservetransactionsbalanceintheUnitedStatesbalanceofpaymentsaccountsis

a.reflectsthedifferencebetweengovernmentspendingandtotaltaxes.

b.negativeifacurrentaccountdeficitexceedsacapitalaccountsurplus.

c.positiveifacurrentaccountdeficitexceedsacapitalaccountsurplus.*

d.noneoftheabove

25.Capitaloutflowsinthebalanceofpaymentsaccountsinclude

a.purchasesoffinancialassetsbyU.S.residents.

b.directinvestmentsinforeigncountries.

c.indirectinvestmentsinforeigncountries.

d.purchasesofU.S.realestatebyforeigners.

e.alloftheabove*

26.Totalcreditsinthebalanceofpaymentsaccountsareequaltothe

a.supplyofforeignexchange.

b.demandfordollars.

c.demandforforeignexchange.

d.supplyofdollars.

e.Eitheraorb*

27.Underafixedexchangeratesystem,thecentralbankmust

a.haveanunlimitedsupplyofdomesticcurrency.

b.haveaverylargesupplyofforeignassets.*

c.followaconstantmoneygrowthrule.

d.allowthemoneysupplytoadjusttokeepinterestratesandexchangeratesunchanged.

28.Atradedeficitcanbefinancedbyallofthefollowingexcept

a.asurplusinthecapitalaccount.

b.asurplusintheofficialreservestransactionaccount.

c.sellingU.S.assetstoforeigners.

d.U.S.citizensbuyingforeignstocksandbonds.*

29.Assumingaflexibleexchangerate,thenanexpansionarymonetarypolicyintheforeignexchange

marketwillshift

a.thedemandcurveforforeignexchangetotheright

b.thedemandcurveforforeignexchangetotherightandthesupplycurveofforeignexchangeto

theleft.*

c.boththedemandcurveforforeignexchangeandthesupplycurveofforeignexchangetotheright.

d.boththedemandcurveforforeignexchangetotheleft.

e.noneoftheabove.

30.Thestatisticaldiscrepancyis

a.alsoknownasthe"errorsandomissionsterm."

b.theamountthatmustbeaddedtobalancethetotalbalanceofpaymentstomakeitequaltozero.

c.theadjustedamounttobalancethecapitalaccount.

d.theadjustedamounttobalancethecurrentaccount.

e.Bothaand

31.Whichofthefollowingstatementsis(are)correct?DuringtheexistenceoftheEuro(1999-),

a.borrowingfromabroadfinancedlargeexcessesofmerchandiseimportsoverexportsintheU.S.

b.theUnitedStateshascontinuedtobetheworld'slargestdebtornation.

c.thedollarinitiallyappreciatedbutthendepreciatedstronglysince2001againsttheeuro.

d.Alloftheabove

32.Whichofthefollowingstatementsis(are)correct?Underafloatingexchangeratesystem

a.dramaticswingsinthedollarhavebecomelesscommonthelast20years.

b.thedollarhasexhibitedconsiderablevolatility,particularlyoverthelast20years.*

c.thevalueofthedollarhasbeentargetedwithinaspecificrange.

d.agradualincreaseinthevalueofthedollarhastakenplace.

33.Atradesurpluscouldbebalancedbyallofthefollowingexcept

a.borrowingfromdomesticcitizens.*

b.sellingdomesticassetstoforeigners.

c.borrowingfromforeigners.

d.sellingforeignassetsalreadyownedbyU.S.citizenstoforeigners.

34.GoodsproducedintheU.S.aremademorecompetitivelypricedwhen

a.thedollarappreciates.

b.thedollardepreciates.*

c.theexchangerateisfixed.

d.themoneysupplyisdecreased.

35.Whichofthefollowingareadvantagesofgreaterexchangerateflexibility?

a.Thealleviationofpotentialconflictsthatarisebetweentheinternalbalanceandtheexternal

balance.*

b.Theinsulationofthedomesticeconomyfromeconomicshocks.

c.Anexpansionabroadwouldhavecontractionaryeffectsonthedomesticeconomy.

d.Bothaandb

e.Bothaandc

36.AssumingtheUnitedStatessendsforeignaidpaymentstoanothercountry.Then,thisisshownin

theU.S.balanceofpaymentsaccountasa

a.creditinthecurrentaccount.

b.debitinthecurrentaccount.*

c.debitinthecapitalaccount.

d.creditinthecapitalaccount.

e.creditintheofficialreservetransactionsaccount.

37.Theexchangeratebetweenthedollarandtheeurois

a.thepriceofEuropeangoodsrelativetoU.S.goods.

b.thepriceofU.S.goodsrelativetoEuropeangoods.

c.thenumberofeurosyougetforlendingonedollartoaEuropeanforayear.

d.thenumberofeurosyougetforonedollar.*

38.Capitaloutflowsinthebalanceofpaymentsaccountsinclude

a.thesaleoffinancialassetsbyU.S.residentstoforeigncitizens.*

b.directinvestmentsintheU.S.byforeigncorporations.

c.indirectinvestmentsintheU.S.byforeigncorporations.

d.purchasesofU.S.governmentbondsbyforeigners.

39.Ifthesurplusinthecapitalaccountaregreaterthanthedeficitinthecurrentaccount,then

a.thecurrentaccountmustbepositiveinthelong-run.

b.thecurrentaccountmustbenegativeinthelong-run.

c.exportsmustbelessthanimports.

d.officialreservetransactionsmustbenegative.*

40.IntheU.S.balanceofpayments,exportstoEuropearerecordedasa

a.auseoffundsinthecurrentaccount.

b.negativeiteminthecurrentaccount.

c.capitalinflowitem.

d.capitaloutflowitem.

e.Noneoftheabove*

41.Inafloatingexchangeratesystem,whennationalsavingsfallsthentheequilibriumexchangerate

a.fallsandthetradebalancefalls.

b.fallsandthetradebalancerises.*

c.risesandthetradebalancefalls.

d.risesandthetradebalancerises.

42.Inafloatingexchangeratesystem,anappreciationoftheexchangeratecouldbecausedby

a.acutintaxes.*

b.adecreaseingovernmentspending.

c.anincreaseinthedomesticmoneysupply.

d.adecreaseintheforeigndemandforU.S.goods.

43.Inafloatingexchangeratesystem,anincreaseinthevalueoftheexchangeratecouldbecausedby

a.anincreaseintaxes.

b.andecreaseingovernmentspending.

c.adecreaseinthedomesticm