单选测试6-8-9-合题

Chapter6,8,91.Ifanidenticalproductcanbesoldintwodifferentmarkets,andnorestrictionsexistonthesaleortransportationcosts,theproduct'spriceshouldbethesameinbothmarkets.Thisisknowas_________A)relativepurchasingpowerparity.B)interestrateparity.C)thelawofoneprice.D)equilibrium.2.________statesthatthespotexchangerateisdeterminedbytherelativepricesofsimilarbasketsofgoods.A)AbsolutepurchasingpowerparityB)RelativepurchasingpowerparityC)InterestrateparityD)TheFisherEffect3.TheEconomistpublishesannuallytheBigMacIndexbywhichtheycomparethepricesoftheMcDonald'sCorporation'sBigMachamburgeraroundtheworld.Theindexestimatestheexchangeratesforcurrenciesbasedontheassumptionthattheburgersinquestionarethesameacrosstheworldandtherefore,thepriceshouldbethesame.IfaBigMaccosts$2.54intheUnitedStatesand294yeninJapan,whatistheestimatedexchangerateofyenperdollarashypothesizedbytheHamburgerindex?A)$0.0086/¥B)124¥/$C)$0.0081/¥D)115.75¥/$4.Ifthecurrentexchangerateis113JapaneseyenperU.S.dollar,thepriceofaBigMachamburgerintheUnitedStatesis$3.41,andthepriceofaBigMachamburgerinJapanis280yen,thenotherthingsequal,theBigMachamburgerinJapanis________.A)correctlypricedB)underpricedC)overpricedD)notenoughinformationtodetermineifthepriceisappropriateornot5.ThepriceofaBigMacintheU.S.is$3.41andthepriceinMexicoisPeso29.0.WhatistheimpliedPPPofthePesoperdollar?A)Peso8.50/$1B)Peso10.8/$1C)Peso11.76/$1D)Noneoftheabove6.TheimpliedPPPrateofexchangeofMexicanPesosperU.S.Dollaris8.50accordingtotheBigMacIndex.ThecurrentexchangerateisPeso10.8/$1.Thus,accordingtoPPPandtheLawofOnePrice,atthecurrentexchangeratethepesois________.A)overvaluedB)undervaluedC)correctlyvaluedD)notenoughinformationtoanswerthisquestion7.IfaccordingtothelawofonepricethecurrentexchangerateofdollarsperBritishpoundis$1.75/£,thenatanexchangerateof$1.85/£,thedollaris________.A)overvaluedB)undervaluedC)correctlyvaluedD)unknownrelativevaluation8.TrueorFalseTheassumptionsforrelativePPParemorerigidthantheassumptionsforabsolutePPP.9.OneyearagothespotrateofU.S.dollarsforCanadiandollarswas$1/C$1.SincethattimetherateofinflationintheU.S.hasbeen4%greaterthanthatinCanada.BasedonthetheoryofRelativePPP,thecurrentspotexchangerateofU.S.dollarsforCanadiandollarsshouldbeapproximately________.A)$0.96/C$B)$1/C$1C)$1.04/C$1D)relativePPPprovidesnoguideforthistypeofquestion10.TrueorFalseEmpiricaltestsprovethatPPPisanaccuratepredictoroffutureexchangerates.11.Twogeneralconclusionscanbemadefromtheempiricaltestsofpurchasingpowerparity(PPP):A)PPPholdsupwellovertheshortrunbutpoorlyforthelongrunandthetheoryholdsbetterforcountrieswithrelativelylowratesofinflation.B)PPPholdsupwellovertheshortrunbutpoorlyforthelongrunandthetheoryholdsbetterforcountrieswithrelativelyhighratesofinflation.C)PPPholdsupwelloverthelongrunbutpoorlyfortheshortrunandthetheoryholdsbetterforcountrieswithrelativelylowratesofinflation.D)PPPholdsupwelloverthelongrunbutpoorlyfortheshortrunandthetheoryholdsbetterforcountrieswithrelativelyhighratesofinflation.12.Ifacountry'srealeffectiveexchangerateindexweretobelessthan100,thiswouldsuggestan________currency.A)overvaluedB)overcompensatingC)undervaluedD)undercompensating13.IfwesettherealeffectiveexchangerateindexbetweenCanadaandtheUnitedStatesequalto100in1998,andfindthattheU.S.dollarhasrisentoavalueof112.6,thenfromacompetitiveperspectivetheU.S.dollarisA)overvalued.B)undervalued.C)verycompetitive.D)Thereisnotenoughinformationtoanswerthisquestion.14.IfwesettherealeffectiveexchangerateindexbetweentheUnitedKingdomandtheUnitedStatesequalto100in2005,andfindthattheU.S.dollarhaschangedtoavalueof91.4,thenfromacompetitiveperspectivetheU.S.dollaris________.A)overvaluedB)undervaluedC)equallyvaluedD)Thereisnotenoughinformationtoanswerthisquestion.15.Exchangeratepass-throughmaybedefinedas________A)thebid/askspreadoncurrencyexchangeratetransactions.B)thedegreetowhichthepricesofimportedandexportedgoodschangeasaresultofexchangeratechanges.C)thePPPoflesser-developedcountries.D)thepracticebyGreatBritainofmaintainingtherelativestrengthofthecurrenciesoftheCommonwealthcountriesunderthecurrentfloatingexchangerateregime.16.PhillipsNVproducesDVDplayersandexportsthemtotheUnitedStates.Lastyeartheexchangeratewas$1.25/euroandPlillipscharged120europerplayerinEurolandand$150perDVDplayerintheUnitedStates.Currentlythespotexchangerateis$1.45/euroandPhillipsischarging$160perDVDplayer.WhatisthedegreeofpassthroughbyPhillipsNVontheirDVDplayers?A)92%B)33.3%C)41.9%D)4.1%17.JaguarhasfullmanufacturingcostsoftheirS-typesedanof£22,803.TheyselltheS-typeintheUKwitha20%marginforapriceof£27,363.TodaythesecarsareavailableintheUSfor$55,000whichistheUKpricemultipliedbythecurrentexchangerateof$2.01/£.JaguarhascommittedtokeepingtheUSpriceat$55,000forthenextsixmonths.IftheUKpoundappreciatesagainsttheUSDtoanexchangerateof$2.15/£,andJaguarhasnothedgedagainstcurrencychanges,whatistheamountthecompanywillreceiveinpoundsatthenewexchangerate?A)£22,803B)£25,581C)£27,363D)£55,00018.JaguarhasfullmanufacturingcostsoftheirS-typesedanof£22,803.TheyselltheS-typeintheUKwitha20%margin