791. The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
A. forward contract
B. spot contract
C. money contract
D. bid contract

792. Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
A. sell; appreciation
B. sell; depreciation
C. buy; depreciation
D. buy; appreciation

793. All currencies other than the domestic currency of a given country are referred to as ?
A. hard currency
B. foreign exchange
C. reserve currencies
D. near monies

794. In 1971, most countries ?
A. adopted a new system of fixed exchange rates
B. gave up trying to fix exchange rates formally and began allowing them to be determined essentially by supply and demand
C. adopted single internationally accepted currency whose use is limited to international transactions
D. returned to the gold standard

795. If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall
B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise
C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.
D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise

796. The fall in value of one currency relative to another is ?
A. a depreciation of a currency
B. a strengthening of a currency
C. a floating of a currency
D. an appreciation of a currency

797. The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
A. price feedback theory
B. trade feedback theory
C. J-curve theory
D. purchasing power parity theory

798. If a nation’s interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
A. depreciate under a system of fixed exchange rates
B. depreciate under a system of floating exchange rates
C. appreciate under a system of floating exchange rates
D. appreciate under a system of floating fixed rates

799. The J-curve effect refers to the observation that ?
A. GDP usually decreases before it increases after a currency depreciation
B. the trade balance usually gets worse before it improves after a currency depreciation
C. the trade balance usually gets better before it gets worse after a currency appreciation
D. GDP usually decreases before it increases after a currency appreciation

800. The supply of foreign currency tends to be ?
A. upward sloping
B. downward sloping
C. vertical
D. any of the above

 

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