International Economics - Monetary Economics

The following factors influence the development of exchange rates: the economic situation of countries, interest rate differences, trade flows, risk premiums.

The domestic interest rate roughly corresponds to the difference between the foreign interest rate and the expected devaluation of the foreign currency.

<p>Current account and capital account (B)</p> Signup and view all the answers

<p>A current account surplus indicates that domestic savings exceed domestic investments, meaning the country is lending money to other countries.</p> Signup and view all the answers

<p>Current account surpluses are a sign of a country's economic strength, as it indicates a high level of savings and investment. (A), Current account surpluses are harmful to the importing country, as they can lead to a decline in domestic production and employment. (C), Current account surpluses are beneficial for the exporting country, but they can lead to imbalances in the global economy. (D)</p> Signup and view all the answers

<p>All of the above. (D)</p> Signup and view all the answers

<p>The ideal currency area would be the entire world.</p> Signup and view all the answers

<p>When the impact of a shock varies between regions. (C)</p> Signup and view all the answers

<p>All of the above. (D)</p> Signup and view all the answers

<p>Both A and B. (C)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>Appreciation occurs when a currency's value increases, while depreciation occurs when its value decreases. (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>It argues that the OCA theory overestimates the importance of asymmetric shocks. (C)</p> Signup and view all the answers

<p>A country implements a contractionary monetary policy, reducing inflation and boosting domestic production. (A)</p> Signup and view all the answers

<p>It produces goods in which it has a lower opportunity cost. (D)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Specialized suppliers, labor pooling, and network effects. (A)</p> Signup and view all the answers

<p>All of the above. (D)</p> Signup and view all the answers

Increase in the value of a currency relative to others.

Decrease in the value of a currency relative to others.

When a country exports more than it imports.

When a country imports more than it exports.

Ability of a country to sell goods internationally.

Money flowing into a country from investments.

Nations with lower economic productivity.

Profit earned from invested capital.

Actions by a central bank to control money supply.

Value of one currency in terms of another.

Calculating the equivalent US dollars for euros.

Exchange of goods and services between countries.

System of production and distribution of goods.

Economic activities in the United States.

When the dollar gains strength against others.

Difference between exports and imports.

Increase in a country's production of goods and services.

Investment in markets outside one's own country.

Goods sent abroad that bring in revenue.

Increase in prices and decrease in currency value.

Record of all economic transactions between residents and the rest of the world.

Negative effects of spending more than earning in trade.

Desire for goods and services in a market.

Money that is not the domestic currency.

Potential for loss from financial investments.

Monetary measure of all finished goods and services produced in a country.

Platforms where currencies are traded.

Regulations related to importing and exporting goods.

The amount charged by lenders to borrowers for the use of money.

Statistics that signal the health of an economy.