Under a flexible exchange rate system, a decrease in the value of a domestic currency in terms of foreign currencies is referred to as
A) an appreciation.
B) a depreciation.
C) a devaluation.
D) a revaluation.
Flexible exchange rates are determined by
A) the government of the exporting country.
B) the government of the importing country.
C) the forces of supply and demand.
D) the IMF.
The demand for foreign currency in the United States is a
A) direct demand.
B) derived demand based on the demand for U.S. products.
C) derived demand based on the demand for foreign products.
D) direct demand based on the demand for U.S. dollars.
Suppose the exchange rate was $0.30 for one Argentine peso. If the exchange rate falls to $0.20 for one peso, we would expect to see
A) more exports to Argentina since the price of the peso has risen.
B) fewer exports to Argentina since the price of the peso has risen.
C) more U.S. imports from Argentina since the price of the peso has fallen.
D) more U.S. exports since the price of the dollar has fallen.