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