Question 1

______________ draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

Accepted Answer

A) Principal investigation 
B) Fundamental analysis 
C) Primary evaluation 
D) Technical analysis 
E) Economic analysis 
A) Principal investigation 
B) Fundamental analysis 
C) Primary evaluation 
D) Technical analysis 
E) Economic analysis

Question 2

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

Accepted Answer

The student should answer that increases

Question 3

The text gives Bolivia as an example of the impact of ______________ on exchange rates.

Accepted Answer

A) interest rates 
B) trade imbalances 
C) market psychology 
D) bad economic management 
E) money supply 
A) interest rates 
B) trade imbalances 
C) market psychology 
D) bad economic management 
E) money supply

Question 4

A stronger Korean won means that Kia cars sold in Canada for dollars are recorded at a higher value when translated back into won.

Accepted Answer

A) True 
 B)False

Question 5

In 2006, the Canadian dollar ranked _________ among all the currencies traded in the world on futures exchanges.

Accepted Answer

A) 14 
B) 7 
C) 25 
D) 35 
E) 27 
A) 14 
B) 7 
C) 25 
D) 35 
E) 27

Question 6

Counter trade refers to a range of barter-like agreements by which goods and services can be traded for other goods and services.

Accepted Answer

A) True 
 B)False

Question 7

When a tourist changes one currency into another, she is participating in currency speculation.

Accepted Answer

A) True 
 B)False

Question 8

A ______________ exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Accepted Answer

A) reverse 
B) spot 
C) hedge 
D) forward 
E) futures 
A) reverse 
B) spot 
C) hedge 
D) forward 
E) futures

Question 9

Which of the following correctly matches a country with its currency?

Accepted Answer

A) Japan, the yuan 
B) South Korea, the baht 
C) Canada, the yen 
D) Great Britain, the pound 
E) China, the rand 
A) Japan, the yuan 
B) South Korea, the baht 
C) Canada, the yen 
D) Great Britain, the pound 
E) China, the rand

Question 10

Although the _____________ offers some insurance against foreign exchange risk, it cannot provide complete insurance.

Accepted Answer

A) foreign exchange market 
B) the Euro 
C) World Bank 
D) foreign currency exchange 
E) the CDC 
A) foreign exchange market 
B) the Euro 
C) World Bank 
D) foreign currency exchange 
E) the CDC

Question 11

According to our textbook, when the growth in a country's money supply is faster than the growth in its output, _____________ is(are) fuelled.

Accepted Answer

A) economic growth 
B) unemployment 
C) inflation 
D) per capita savings 
E) wage increases 
A) economic growth 
B) unemployment 
C) inflation 
D) per capita savings 
E) wage increases

Question 12

A less extreme version of the PPP theory states that given ______________, that is, markets in which few impediments to international trade and investment exist-the price of a "basket of goods" should be roughly equivalent in each country.

Accepted Answer

A) relatively efficient markets 
B) statutory markets 
C) stable markets 
D) absolutely free markets 
E) mixed economies 
A) relatively efficient markets 
B) statutory markets 
C) stable markets 
D) absolutely free markets 
E) mixed economies

Question 13

At the most basic level, exchange rates are determined by the demand and supply of one currency relative to the

Accepted Answer

A) permanent value of another 
B) 30-day average of another 
C) 90-day average of another 
D) demand and supply of another 
E) market psychology 
A) permanent value of another 
B) 30-day average of another 
C) 90-day average of another 
D) demand and supply of another 
E) market psychology

Question 14

Without the foreign market exchange, international trade and international investment on the scale that we see today would be impossible.

Accepted Answer

A) True 
 B)False

Question 15

Arbitrage is the process of buying a currency high and selling it low.

Accepted Answer

A) True 
 B)False

Question 16

Tourists play a major role in the foreign exchange market.

Accepted Answer

A) True 
 B)False

Question 17

The PPP theory tells us that a country with a high inflation rate will see:

Accepted Answer

A) a depreciation in its currency exchange rate 
B) an appreciation in its currency exchange rate 
C) no change in its currency exchange rate as a result of the inflation rate 
D) economic stability as a result of high inflation 
E) price rises to match neighbouring country prices 
A) a depreciation in its currency exchange rate 
B) an appreciation in its currency exchange rate 
C) no change in its currency exchange rate as a result of the inflation rate 
D) economic stability as a result of high inflation 
E) price rises to match neighbouring country prices

Question 18

A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.

Accepted Answer

A) True 
 B)False

Question 19

A(n) ___________ market is one in which prices do not reflect all available information.

Accepted Answer

A) efficient 
B) inefficient 
C) free 
D) closed 
E) regulated 
A) efficient 
B) inefficient 
C) free 
D) closed 
E) regulated

Question 20

The foreign exchange market:

Accepted Answer

A) is not located in any one place 
B) is located in New York City 
C) has offices in the Capitols of the five most powerful industrialized nations in the world 
D) is located in London 
E) is managed by the UN 
A) is not located in any one place 
B) is located in New York City 
C) has offices in the Capitols of the five most powerful industrialized nations in the world 
D) is located in London 
E) is managed by the UN

______________ draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

The text gives Bolivia as an example of the impact of ______________ on exchange rates.

A stronger Korean won means that Kia cars sold in Canada for dollars are recorded at a higher value when translated back into won.

In 2006, the Canadian dollar ranked _________ among all the currencies traded in the world on futures exchanges.

Counter trade refers to a range of barter-like agreements by which goods and services can be traded for other goods and services.

When a tourist changes one currency into another, she is participating in currency speculation.

A ______________ exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Which of the following correctly matches a country with its currency?

Although the _____________ offers some insurance against foreign exchange risk, it cannot provide complete insurance.

According to our textbook, when the growth in a country's money supply is faster than the growth in its output, _____________ is(are) fuelled.

A less extreme version of the PPP theory states that given ______________, that is, markets in which few impediments to international trade and investment exist-the price of a "basket of goods" should be roughly equivalent in each country.

At the most basic level, exchange rates are determined by the demand and supply of one currency relative to the

Without the foreign market exchange, international trade and international investment on the scale that we see today would be impossible.

Arbitrage is the process of buying a currency high and selling it low.

Tourists play a major role in the foreign exchange market.

The PPP theory tells us that a country with a high inflation rate will see:

A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.

A(n) ___________ market is one in which prices do not reflect all available information.

The foreign exchange market:

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting, Importing, and Countertrade

Global Marketing and RD

Global Production, Outsourcing, and Logistics

Global Human Resource Management

Filters

Exam 9: The Foreign Exchange Market

______________ draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.

The Canadian dollar has risen against the U.S.dollar.Many manufacturers are complaining that this rise may affect their U.S.export market.Explain.

The text gives Bolivia as an example of the impact of ______________ on exchange rates.

A stronger Korean won means that Kia cars sold in Canada for dollars are recorded at a higher value when translated back into won.

In 2006, the Canadian dollar ranked _________ among all the currencies traded in the world on futures exchanges.

Counter trade refers to a range of barter-like agreements by which goods and services can be traded for other goods and services.

When a tourist changes one currency into another, she is participating in currency speculation.

A ______________ exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Which of the following correctly matches a country with its currency?

Although the _____________ offers some insurance against foreign exchange risk, it cannot provide complete insurance.

According to our textbook, when the growth in a country's money supply is faster than the growth in its output, _____________ is(are) fuelled.

A less extreme version of the PPP theory states that given ______________, that is, markets in which few impediments to international trade and investment exist-the price of a "basket of goods" should be roughly equivalent in each country.

At the most basic level, exchange rates are determined by the demand and supply of one currency relative to the

Without the foreign market exchange, international trade and international investment on the scale that we see today would be impossible.

Arbitrage is the process of buying a currency high and selling it low.

Tourists play a major role in the foreign exchange market.

The PPP theory tells us that a country with a high inflation rate will see:

A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.

A(n) ___________ market is one in which prices do not reflect all available information.

The foreign exchange market:

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting, Importing, and Countertrade

Global Marketing and RD

Global Production, Outsourcing, and Logistics

Global Human Resource Management

Filters