Question 1

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 2

When a Canadian tourist in England goes to a bank to convert her dollars in pounds,the exchange rate is the forward exchange rate.

Accepted Answer

A) True 
 B)False

Question 3

In essence,PPP theory predicts that

Accepted Answer

A)  there is no relationship between changes in relative prices and changes in exchange rates. 
B)  changes in relative prices will result in stability in exchange rates. 
C)  stability in relative prices will result in a change in exchange rates. 
D)  changes in relative prices will result in a change in exchange rates. 
E)  changes in market barriers will result in changes in exchange rates 
A)  there is no relationship between changes in relative prices and changes in exchange rates. 
B)  changes in relative prices will result in stability in exchange rates. 
C)  stability in relative prices will result in a change in exchange rates. 
D)  changes in relative prices will result in a change in exchange rates. 
E)  changes in market barriers will result in changes in exchange rates

Question 4

A government restricts the convertibility of its currency to protect the country's _____________ and to halt any capital flight.

Accepted Answer

A)  membership in the World Trade Organization 
B)  foreign exchange reserves 
C)  political stature 
D)  national sovereignty 
E)  economic stability 
A)  membership in the World Trade Organization 
B)  foreign exchange reserves 
C)  political stature 
D)  national sovereignty 
E)  economic stability

Question 5

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

Accepted Answer

A)  The international monetary authority 
B)  Market mechanisms 
C)  The private sector 
D)  Government policy 
E)  Demand for money 
A)  The international monetary authority 
B)  Market mechanisms 
C)  The private sector 
D)  Government policy 
E)  Demand for money

Question 6

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

Accepted Answer

A) True 
 B)False

Question 7

_____________ is based on the premise that analyzable market trends and waves can be used to predict future trends and waves.

Accepted Answer

A)  Technical analysis 
B)  Fundamental analysis 
C)  Basic analysis 
D)  Central analysis 
E)  Econometric analysis 
A)  Technical analysis 
B)  Fundamental analysis 
C)  Basic analysis 
D)  Central analysis 
E)  Econometric analysis

Question 8

The foreign exchange market converts the currency of one country into the currency of another and:

Accepted Answer

A)  provides some insurance against foreign exchange risk 
B)  collects duties on imported products 
C)  sets interest rates charged to foreign investors 
D)  arbitrates disputes between trade partners 
E)  reduces trade imbalances between countries 
A)  provides some insurance against foreign exchange risk 
B)  collects duties on imported products 
C)  sets interest rates charged to foreign investors 
D)  arbitrates disputes between trade partners 
E)  reduces trade imbalances between countries

Question 9

The _____________ market school argues that forward exchange rates do the best possible job of forecasting future spot exchange rates,so investing in exchange rate forecasting services would be a waste of time.

Accepted Answer

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

Question 10

An importer enters into a 60 day forward exchange rate for converting dollars into yuan.The spot exchange rate is 5.28 yuan for 1 dollar.The forward exchange rate is 5.27 yuan for 1 dollar.What is the difference in the amount the importer receives using the forward exchange rate and the spot exchange rate.

Accepted Answer

A)  100,000 
B)  5,000 
C)  500 
D)  50 
E)  250 
A)  100,000 
B)  5,000 
C)  500 
D)  50 
E)  250

Question 11

A(n)_______________ is a market in which few impediments to international trade and investment exist.

Accepted Answer

A)  relatively efficient market 
B)  consistently inefficient market 
C)  absolutely free market 
D)  absolutely closed 
E)  free market 
A)  relatively efficient market 
B)  consistently inefficient market 
C)  absolutely free market 
D)  absolutely closed 
E)  free market

Question 12

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

Accepted Answer

A)  foreign exchange 
B)  financial barter 
C)  foreign resale 
D)  monetary replacement 
E)  capital market 
A)  foreign exchange 
B)  financial barter 
C)  foreign resale 
D)  monetary replacement 
E)  capital market

Question 13

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

Accepted Answer

A)  Reciprocal 
B)  Hedge 
C)  Reverse 
D)  Forward 
E)  Future 
A)  Reciprocal 
B)  Hedge 
C)  Reverse 
D)  Forward 
E)  Future

Question 14

When two parties agree to exchange currency and execute the deal immediately,the transaction is referred to as a ______________.

Accepted Answer

A)  point-in-time exchange 
B)  temporal exchange 
C)  spot exchange 
D)  forward exchange 
E)  transaction 
A)  point-in-time exchange 
B)  temporal exchange 
C)  spot exchange 
D)  forward exchange 
E)  transaction

Question 15

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 16

Investor expectations about likely future exchange rates have a tendency to become __________.

Accepted Answer

A)  the PPP 
B)  speculative exchange rates 
C)  self-fulfilling prophecies 
D)  the IFE 
E)  interest rates 
A)  the PPP 
B)  speculative exchange rates 
C)  self-fulfilling prophecies 
D)  the IFE 
E)  interest rates

Question 17

Rates for currency exchange quoted for 30,90,or 180 days into the future are referred to as _____________.

Accepted Answer

A)  forward exchange rates 
B)  foreign exchange quotes 
C)  united trade rates 
D)  generic exchange quotes 
E)  future exchange rates 
A)  forward exchange rates 
B)  foreign exchange quotes 
C)  united trade rates 
D)  generic exchange quotes 
E)  future exchange rates

Question 18

When a U.S.tourist in Japan goes to a bank to convert her dollars into Japanese yen,the exchange rate is the

Accepted Answer

A)  forward exchange rate. 
B)  regulated exchange rate. 
C)  sanctioned exchange rate. 
D)  spot exchange rate. 
E)  Japanese central bank rate. 
A)  forward exchange rate. 
B)  regulated exchange rate. 
C)  sanctioned exchange rate. 
D)  spot exchange rate. 
E)  Japanese central bank rate.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Currency speculation typically involves what?

Accepted Answer

A)  the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates 
B)  the permanent movement of funds from one currency to another in the hopes of profiting from long-term investment in a particular country 
C)  the simultaneous purchase of currencies from several countries in hopes of profiting from increasing economic prosperity 
D)  the liquidation of currency in favour of precious metals as a hedge against inflation 
E)  Buying low and holding currency until it stabilizes, than selling 
A)  the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates 
B)  the permanent movement of funds from one currency to another in the hopes of profiting from long-term investment in a particular country 
C)  the simultaneous purchase of currencies from several countries in hopes of profiting from increasing economic prosperity 
D)  the liquidation of currency in favour of precious metals as a hedge against inflation 
E)  Buying low and holding currency until it stabilizes, than selling

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

When a Canadian tourist in England goes to a bank to convert her dollars in pounds,the exchange rate is the forward exchange rate.

In essence,PPP theory predicts that

A government restricts the convertibility of its currency to protect the country's _____________ and to halt any capital flight.

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

_____________ is based on the premise that analyzable market trends and waves can be used to predict future trends and waves.

The foreign exchange market converts the currency of one country into the currency of another and:

The _____________ market school argues that forward exchange rates do the best possible job of forecasting future spot exchange rates,so investing in exchange rate forecasting services would be a waste of time.

A(n)_______________ is a market in which few impediments to international trade and investment exist.

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

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

When two parties agree to exchange currency and execute the deal immediately,the transaction is referred to as a ______________.

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

Investor expectations about likely future exchange rates have a tendency to become __________.

Rates for currency exchange quoted for 30,90,or 180 days into the future are referred to as _____________.

When a U.S.tourist in Japan goes to a bank to convert her dollars into Japanese yen,the exchange rate is the

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

Currency speculation typically involves what?

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 Randd

Global Manufacturing and Materials Management

Global Human Resource Management

Filters

Exam 9: The Foreign Exchange Market

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

When a Canadian tourist in England goes to a bank to convert her dollars in pounds,the exchange rate is the forward exchange rate.

In essence,PPP theory predicts that

A government restricts the convertibility of its currency to protect the country's _____________ and to halt any capital flight.

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

_____________ is based on the premise that analyzable market trends and waves can be used to predict future trends and waves.

The foreign exchange market converts the currency of one country into the currency of another and:

The _____________ market school argues that forward exchange rates do the best possible job of forecasting future spot exchange rates,so investing in exchange rate forecasting services would be a waste of time.

A(n)_______________ is a market in which few impediments to international trade and investment exist.

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

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

When two parties agree to exchange currency and execute the deal immediately,the transaction is referred to as a ______________.

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

Investor expectations about likely future exchange rates have a tendency to become __________.

Rates for currency exchange quoted for 30,90,or 180 days into the future are referred to as _____________.

When a U.S.tourist in Japan goes to a bank to convert her dollars into Japanese yen,the exchange rate is the

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

Currency speculation typically involves what?

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 Randd

Global Manufacturing and Materials Management

Global Human Resource Management

Filters