When the price of foreign currency (the exchange rate) is above the equilibrium level ?

Related Mcqs:

A primary reason that explains the appreciation in the value of U.S dollar would be ?

A. large trade surpluses for the United States B. high inflation rates in the United States C. lack of investor confidence in U.S money policy D. high interest rates in the United States...

When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?

A. an excess demand for that currency exists in the foreign exchange market B. an excess supply of the currency exists in the foreign exchange market C. the demand for foreign exchange shifts outward to the right D. the demand for foreign exchange shifts backward to the left...

Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?

A. increasing portfolio investment into the United States B. decreasing portfolio investment into the United States C. increasing direct investment into the United States D. decreasing direct investment into the United States...

Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?

A. anticipate the dollar to depreciate against the euro B. anticipate the dollar to appreciate against the euro C. anticipate the dollar’s exchange rate against the euro to remain constant D. have no anticipation concerning future movements in the dollar/euro exchange rate...

IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?

A. $50 per pound B. $1.00 per pound C. $2.00 per pound D. $8.00 per pound...