Exam 4: Exchange Rate Determination

The price of a commodity in the US is USD2.54, while the price of the same commodity in Australia is AUD3.00 and the AUD/USD exchange rate is 1.8769. What is the AUD/USD exchange rate compatible with the derivation of PPP?

(Multiple Choice)

4.8/5

(38)

Question 21

Which of the following assumptions is NOT compatible with PPP in its strict form?

(Multiple Choice)

4.9/5

(39)

Question 22

The government can affect the exchange rate by:

(Multiple Choice)

4.9/5

(40)

Question 23

A rise in the domestic inflation rate and a simultaneous fall in the foreign inflation rate lead to:

(Multiple Choice)

4.7/5

(32)

Question 24

Which of the following is NOT an argument for central bank intervention?

(Multiple Choice)

4.7/5

(39)

Question 25

Central banks intervene in the foreign exchange market to:

(Multiple Choice)

4.8/5

(40)

Question 26

Which of the following may be taken in support of the PPP hypothesis?

(Multiple Choice)

4.9/5

(31)

Question 27

The presence of the bid-offer spread in foreign exchange transactions:

(Multiple Choice)

4.9/5

(46)

Question 28

The price of a commodity in the US is USD2.54, while the price of the same commodity in Australia is AUD3.00 and the AUD/USD exchange rate is 1.8769. What is the Australian dollar price of the commodity compatible with the derivation of PPP?

(Multiple Choice)

4.8/5

(40)

Question 29

Some countries have high interest rates and depreciating currencies because:

(Multiple Choice)

4.9/5

(43)

Question 30

At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the forecast inflation rates for 2002 were 4.00% for Australia and 2.50% for the US. What is the AUD/USD exchange rate forecast to be at the end of 2002, according to PPP theory?

(Multiple Choice)

4.8/5

(34)

Question 31

Which of the following statements is consistent with the monetary model of exchange rate determination?

(Multiple Choice)

4.8/5

(35)

Question 32

Which of the following was NOT a reason for the appreciation of the Australian dollar between July

(Multiple Choice)

4.8/5

(41)

Question 33

If the domestic currency price of a commodity is greater than the domestic currency equivalent of the foreign price of the same commodity, then the derivation of PPP implies that:

(Multiple Choice)

4.7/5

(40)

Question 34

'News' as used in the exchange rate literature refers to:

(Multiple Choice)

4.9/5

(34)

Question 35

According to the monetary model of exchange rates, a fall in national real income will lead to:

(Multiple Choice)

4.9/5

(35)

Question 36

At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the forecast inflation rates for 2002 were 3.00% for Australia and 4.00% for the US. What is the AUD/USD exchange rate forecast to be at the end of 2002, according to PPP theory?

(Multiple Choice)

4.8/5

(30)

Question 37

Which of the following is NOT conducive to the success of central bank intervention?

(Multiple Choice)

4.9/5

(47)

Question 38

Which of the following is NOT a reason why the RBA intervenes in the foreign exchange market?

(Multiple Choice)

4.8/5

(34)

Question 39

Showing 21 - 39 of 39

The price of a commodity in the US is USD2.54, while the price of the same commodity in Australia is AUD3.00 and the AUD/USD exchange rate is 1.8769. What is the AUD/USD exchange rate compatible with the derivation of PPP?

Which of the following assumptions is NOT compatible with PPP in its strict form?

The government can affect the exchange rate by:

A rise in the domestic inflation rate and a simultaneous fall in the foreign inflation rate lead to:

Which of the following is NOT an argument for central bank intervention?

Central banks intervene in the foreign exchange market to:

Which of the following may be taken in support of the PPP hypothesis?

The presence of the bid-offer spread in foreign exchange transactions:

The price of a commodity in the US is USD2.54, while the price of the same commodity in Australia is AUD3.00 and the AUD/USD exchange rate is 1.8769. What is the Australian dollar price of the commodity compatible with the derivation of PPP?

Some countries have high interest rates and depreciating currencies because:

At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the forecast inflation rates for 2002 were 4.00% for Australia and 2.50% for the US. What is the AUD/USD exchange rate forecast to be at the end of 2002, according to PPP theory?

Which of the following statements is consistent with the monetary model of exchange rate determination?

Which of the following was NOT a reason for the appreciation of the Australian dollar between July

If the domestic currency price of a commodity is greater than the domestic currency equivalent of the foreign price of the same commodity, then the derivation of PPP implies that:

'News' as used in the exchange rate literature refers to:

According to the monetary model of exchange rates, a fall in national real income will lead to:

At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the forecast inflation rates for 2002 were 3.00% for Australia and 4.00% for the US. What is the AUD/USD exchange rate forecast to be at the end of 2002, according to PPP theory?

Which of the following is NOT conducive to the success of central bank intervention?

Which of the following is NOT a reason why the RBA intervenes in the foreign exchange market?

An Overview

The Foreign Exchange Market

The Balance of Payments and Effective Exchange Rate

The International Monetary System and Exchange Rate Arrangements

The Eurocurrency Market and International Banking

International Banking Regulation and Basel Accords

Exchange Rate Forecasting, Technical Analysis and Trading Rules

Currency Futures and Swaps

Currency Options

International Arbitarage

Foreign Exchange Risk and Exposure

Foreign Exchange Risk Management

International Short-Term Financing and Investment

International Long-Term Financing and Investment

Foreign Direct Investment and International

Filters