Exam 6: Currency and Foreign Exchange

While the price of a currency is a function of economic and political trends, it can also be directly affected by government intervention. Discuss the impact of the four main types of government policy that affect currency valuations and foreign exchange rates.

Which of the following is a difference between fiat currencies and cryptocurrencies?

In the context of money, identify a true statement about fiat currencies.

In the context of managing exchange rate risks, which of the following statements is true of FX swaps?

The ratio that tells how much of one currency is needed in order to buy an equivalent amount of purchasing power in a different currency is known as the currency's _____.

Anghona recently faced a severe economic crisis. This resulted in most companies going bankrupt with reduced employment rates all over the nation. In essence, Anghona experienced a negative gross domestic product (GDP). Which of the following statements was likely to be true of the nation of Anghona in this scenario?

In contrast to currencies that have been declared to be a legal tender by a nation's government, in case of cryptocurrencies, _____.

The National Bank of Fragana implements monetary policies that help to control currency supply and maintain price stability. When there is a demand, the bank prints more money. This increases currency supply and stimulates borrowing and growth within Fragana. Predict the most likely outcome when this increase causes a decline in the purchasing value of money in Fragana.

Gradium Technosoft, one of the leading laptop manufacturers in the country of Bhodonia, wants to open its stores in the country of Cregonasa. To finance the stores' rent, Gradium Technosoft sells Bhodos, currency of Bhodonia, and it acquires Crego dollars, currency of Cregonasa. In the context of exchange rates, identify the most likely outcome if the demand for Crego dollars is higher than that of Bhodos.

Leather sold in the country of Zanasia costs the same as leather sold in the countries of Meramba, Chidean, and Pareuim. In the context of currency values, this exemplifies:

In the context of foreign exchange, the difference between the buy and sell price for a currency is referred to as a _____.

Dansaz is one of the largest textile-producing nations. However, little demand exists within the country for its own goods because incomes are traditionally low and most of the produced textiles are too expensive for the average Dansazian. In spite of this, the Dansazian government chooses to keep its currency valuation low. This is likely to:

Assess the causes and consequences of the Chinese government's attempt to maintain a low currency valuation.

Identify a difference between fiat currencies and cryptocurrencies.

The country of Cloden witnesses a major economic downfall in its current financial year because of monetary losses in the nation's major business sectors. This economic decline, in turn, causes a decrease in the value of the nation's currency relative to that of other nations'. In the context of the foreign exchange market, the decrease in Cloden's currency value is referred to as _____.

Imagine that the exchange rate for trading Shealton Sheas for Rosmanian Ros is 0.75 Ros to 1 Sheas. Given that Sheas is the domestic currency, estimate the exchange rate for trading Sheas to Ros.

A Big Mac costs 4 Jon in the country of Jonanda, where Jon is the national currency, whereas in the country of Forunisa, where Fortan is the national currency, it costs 2.5 Fortan. If Fortan is the domestic currency, then the exchange rate is 1.60. Hence, if the exchange rate of Jon to Fortan is any greater, the Big Mac Index would state that:

The Central Bank of Curisia is responsible for performing functions such as printing money, increasing currency supply, raising interest rates, etc. The bank, therefore, uses monetary policies to control the supply of its currency with the goal of:

In the context of the foreign exchange market, _____ is defined as a decrease in the value of one currency relative to another currency.

Ramanond Technologies is an independent business that facilitates foreign exchange trades. In the context of institutions that make foreign exchange happen, Ramanond Technologies is categorized under: