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