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