Question

4.   Answer True or False for each of the following.                       30 pts

High spending and low savings in the U.S. helps cause our balance of payments issues.

       President Carter took us off the gold exchange standard.

Most economists support a return to fixed exchange rates, such as the gold standard.

If the U.S. government wanted the dollar to rise it needs to sell dollars.

The gold standard pushed up interest rates in the late 1800s harming farmers.

An increase in the demand for the dollar can occur alone with no other currency changing.

The British pound was the central currency of the Bretton Woods system.  

Speculators buy currencies not to use them but because they hope sell them later for a profit.

Semi-fixed exchange rate systems are when the government establishes a trading range for their currency rather than a set value.

If the yen rises in value relative to the dollar it makes Japanese goods cheaper to U.S. buyers.

Answer 1

High spending and low savings in the U.S. helps cause our balance of payments issues - FALSE

The British pound was the central currency of the Bretton Woods system - FALSE

Speculators buy currencies not to use them but because they hope sell them later for a profit - FALSE

Semi-fixed exchange rate systems are when the government establishes a trading range for their currency rather than a set value - TRUE

If the yen rises in value relative to the dollar it makes Japanese goods cheaper to U.S. buyers - TRUE