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Exchange Rates and Net Exports quiz

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Termini in questo insieme (15)

  • What is the nominal exchange rate?
    The nominal exchange rate is the rate at which one currency can be exchanged for another in the market.
  • What happens to imports when the US dollar appreciates?
    Imports increase because the stronger US dollar can buy more foreign goods, making them relatively cheaper.
  • How does a stronger US dollar affect US exports?
    US exports decrease because US goods become more expensive for foreign buyers.
  • What is the effect on net exports when the US dollar appreciates?
    Net exports decrease because exports fall and imports rise.
  • What does it mean when a currency appreciates?
    Currency appreciation means the currency can buy more of a foreign currency than before.
  • If the US dollar depreciates, what happens to US imports?
    US imports decrease because the dollar buys less foreign currency, making foreign goods more expensive.
  • How does a weaker US dollar affect US exports?
    US exports increase because US goods become cheaper for foreign buyers.
  • What is the relationship between currency appreciation and depreciation?
    If one currency appreciates, the other currency in the pair must depreciate.
  • How do exchange rates impact the trade deficit?
    A stronger dollar can lead to a larger trade deficit by increasing imports and decreasing exports.
  • What is the formula for net exports?
    Net exports equal exports minus imports.
  • What happens to net exports when the US dollar depreciates?
    Net exports increase because exports rise and imports fall.
  • Why do US companies benefit from a weaker dollar?
    A weaker dollar makes US goods cheaper for foreign buyers, increasing exports.
  • What is a trade surplus and when does it occur?
    A trade surplus occurs when net exports are positive, often when the domestic currency is weaker.
  • If the exchange rate changes from 108 yen per dollar to 112 yen per dollar, what has happened to the US dollar?
    The US dollar has appreciated because it now buys more yen per dollar.
  • How does currency depreciation affect the purchasing power of foreign goods?
    Currency depreciation reduces the purchasing power for foreign goods, making them more expensive.