Reference no: EM132342467
1) In the presence of purchasing-power parity, if one dollar exchanges for four Swedish Kroner and if a television costs $300 in the United States, then in Sweden the television should cost:
A) 300 Kroner
B) 75 Kroner
C) 1400 Kroner
D) 1200 Kroner
2) If it takes 0.20 dollars to buy a Mexican Peson and 0.80 dollars to buy a Brazilian Real, then it takes _____ pesos to buy one Brazilian Real.
A) 4
B) 1/4
C) 2
D) 1/2
3) Suppose the nominal U.S.-Canada exchange rate is $1.5 per Canadian Dollar, the U.S. has a 5% inflation, and Canada has 0% inflation. Under these conditions the real U.S.-Canada exchange rate, rounded to the nearest cent, is approximately:
A) $1.43 per Canadian Dollar
B) $1.58 per Canadian Dollar
C) $1.55 per Canadian Dollar
D) $1.45 per Canadian Dollar
4) Suppose the U.S.-EU exchange rate is $1.6 per Euro, the U.S. has 10% inflation, and the EU has 15% inflation. Under these conditions the real U.S.-EU exchange rate, rounded to the nearest cent, is approximately:
A) $1.67 per Euro
B) $1.53 per Euro
C) $1.65 per Euro
D) $1.55 per Euro
5)When the United States abandoned the Bretton Woods system in in the 1970's the value of the dollar ________ and the Unites States was accused of ________.
A) decreased; price fixing
B) decreased; exporting inflation
C) decreased; importing inflation
D) increased; price fixing