1.The dollar
against the euro when the European central bank lowers interest rates.
2.If the dollar appreciates against the euro, then the euro also
against the dollar.
3. The price of one country’s currency in terms of another country’s currency is called the
.
4. All else constant, an excess supply of pounds will cause the dollar to(appreciate/depreciate) against the pound.
5.The best measure of the purchasing power of one currency relative to another is the
.
6. in the U.S. and foreign price levels remain the same but the dollar appreciates, the real exchange rate will .
7.The law of one price provides accurate predictions of current exchange rates
. (True/False)
8.Suppose that a laptop computer costs 840 British pounds in the United Kingdom and $1,400 in the United States. If the nominal exchange rate is 0.6 pounds per U.S. dollar, then the real exchange rate is
British laptop(s) per U.S. laptop compute