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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. Domestic residents' purchase of foreign assets minus foreigners' purchase of domestic assets
Balance of payment
Net capital outflow
Foreign direct investment
Depreciation (weakening)
2. The notion that a good should sell for the same price in all markets
Managed (dirty) ER
Law of one price
Nominal ER
Balance of payment
3. Rate at which the g/s of one country trade for the g/s of another
Real ER
Determinants of exchange rates
Appreciation (strengthening)
Strong dollar
4. When the dollar will buy a lot of foreign currency (appreciating)
Managed (dirty) ER
Free Floating ER
Strong dollar
Nominal ER
5. When countries buy/sell currency to attempt to control ER
Foreign direct investment
Real ER
Managed (dirty) ER
Law of one price
6. When the dollar buys little foreign currency (depreciating)
Weak dollar
Free Floating ER
Nominal ER
Fixed ER
7. 1) changes in tastes - 2) relative income changes - 3) relative price changes - 4) relative interest rates - 5) expectations
Real ER
Free Floating ER
Determinants of exchange rates
Appreciation (strengthening)
8. All determined by S/D of that foreign money
Depreciation (weakening)
Free Floating ER
Real ER
Purchasing power parity
9. Domestic residents buy foreign stocks and bonds - supplying loanable funds to a foreign firm
Purchasing power parity
Foreign portfolio investment
Real ER
Nominal ER
10. Decrease in the value of currency as measured by the amount of foreign currency it can buy
Nominal ER
Net capital outflow
Weak dollar
Depreciation (weakening)
11. An increase in the value of a currency as measured by the amount of foreign currency it can buy
Fixed ER
Determinants of exchange rates
Depreciation (weakening)
Appreciation (strengthening)
12. Domestic residents actively manage the foreign investment
Foreign direct investment
Law of one price
Free Floating ER
Foreign portfolio investment
13. Theory of exchange rates where a unit of any currency should be able to buy the same quantity of goods in all countries
Free Floating ER
Purchasing power parity
Appreciation (strengthening)
Determinants of exchange rates
14. When a gov artificially fixes the ER (poor/small countries)
Fixed ER
Nominal ER
Real ER
Appreciation (strengthening)
15. 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
Free Floating ER
Depreciation (weakening)
Weak dollar
16. The rate at which one country's currency trades for another
Law of one price
Strong dollar
Nominal ER
Free Floating ER