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