The international organization that monitors balance of payments and exchange rate activities is the _________..

World Trade Organization
UN
European Central Bank
International Monetary Fund

The market in which the currency of one country is exchanged for the currency of another country is the ______________.

London Money Exchange
foreign currency market
foreign exchange market
G8

Suppose that $1 U.S. can buy £0.64 and £1 can buy $1.56 U.S. These are examples of __________________.

foreign exchange rates
currency appreciation
changes in the prices of net exports
purchasing power of parity

Between 1976 and 2000, the pound _______ against the Japanese yen, and the Japanese yen ________ against the pound.

value changed little; appreciated
appreciated; depreciated
depreciated; appreciated
trended upward; trended downward

The interest rate on a sterling asset minus the interest rate on a foreign currency asset is called the ___________________.

foreign interest rate differential
UK interest rate differential
UK bond rate differential
UK stock yield differential

If the exchange rate rises, there is a _______ the demand curve for sterling assets, and if the expected future value of the pound sterling falls, there is a _______ the demand curve for sterling assets.

movement down along; rightward shift of
movement up along; leftward shift of
movement up along; movement up along
leftward shift; leftward shift of

The supply curve of sterling assets shifts leftward. This could have been influenced by _______________.

a UK government budget surplus
a UK government budget deficit
a rise in the exchange rate
a purchase of foreign currency by the Bank of England

Suppose that $1 U.S. costs £0.60. If in New York a CD costs $10 U.S. and in Edinburgh it costs £6, then __________________.

Americans will buy CDs in Edinburgh
Virgin Records will have an incentive to build more stores in North America
UK residents will buy CDs in New York
purchasing power parity exists

The arguments in favour of a single currency are mostly ____________________ and the arguments against a single currency are mostly __________.

microeconomic; macroeconomic and political
macroeconomic; macroeconomic
microeconomic; microeconomic
macroeconomic; microeconomic and political

Since the euro came into existence on January 1, 1999, it has _______ against the U.S. dollar and ________________ against the pound sterling.

depreciated; appreciated
appreciated; appreciated
appreciated; depreciated
depreciated; depreciated