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