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Test your basic knowledge |
AP Foreign Exchange
Start Test
Study First
Subjects
:
AP
,
forex
,
industries
Instructions:
Answer 16 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. 1) changes in tastes - 2) relative income changes - 3) relative price changes - 4) relative interest rates - 5) expectations
Balance of payment
Determinants of exchange rates
Free Floating ER
Depreciation (weakening)
2. Record of a country's transactions in g - s - and assets with the rest of the world - also country's sources (supply)
Balance of payment
Real ER
Nominal ER
Weak dollar
3. An increase in the value of a currency as measured by the amount of foreign currency it can buy
Appreciation (strengthening)
Nominal ER
Real ER
Fixed ER
4. When countries buy/sell currency to attempt to control ER
Managed (dirty) ER
Nominal ER
Foreign portfolio investment
Appreciation (strengthening)
5. When the dollar will buy a lot of foreign currency (appreciating)
Free Floating ER
Law of one price
Strong dollar
Depreciation (weakening)
6. All determined by S/D of that foreign money
Nominal ER
Foreign portfolio investment
Law of one price
Free Floating ER
7. When the dollar buys little foreign currency (depreciating)
Appreciation (strengthening)
Weak dollar
Determinants of exchange rates
Strong dollar
8. When a gov artificially fixes the ER (poor/small countries)
Weak dollar
Real ER
Balance of payment
Fixed ER
9. Decrease in the value of currency as measured by the amount of foreign currency it can buy
Purchasing power parity
Real ER
Fixed ER
Depreciation (weakening)
10. Rate at which the g/s of one country trade for the g/s of another
Net capital outflow
Appreciation (strengthening)
Real ER
Law of one price
11. Domestic residents' purchase of foreign assets minus foreigners' purchase of domestic assets
Determinants of exchange rates
Net capital outflow
Managed (dirty) ER
Balance of payment
12. The rate at which one country's currency trades for another
Free Floating ER
Law of one price
Nominal ER
Balance of payment
13. The notion that a good should sell for the same price in all markets
Law of one price
Purchasing power parity
Foreign portfolio investment
Net capital outflow
14. Theory of exchange rates where a unit of any currency should be able to buy the same quantity of goods in all countries
Weak dollar
Purchasing power parity
Net capital outflow
Strong dollar
15. Domestic residents actively manage the foreign investment
Strong dollar
Balance of payment
Managed (dirty) ER
Foreign direct investment
16. Domestic residents buy foreign stocks and bonds - supplying loanable funds to a foreign firm
Foreign portfolio investment
Weak dollar
Determinants of exchange rates
Managed (dirty) ER