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