ECON216_Spring2011_Tutorials_Ch_11_to_15_mcqs

ECON216_Spring2011_T - Review MCQs 13 14 and 15 Chapter 11 1 Which is not a function of the foreign exchange market a to transfer funds from one

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Review MCQs Chapter 11 12 13 14 and 15 Chapter 11 1. Which is not a function of the foreign exchange market? a. to transfer funds from one nation to another b. to finance trade c. to diversify risks d. to provide the facilities for hedging 2. An increase in the euro price of the dollar represents: a. an appreciation of the dollar b. a depreciation of the dollar c. an appreciation of the pound d. a devaluation of the dollar 3. A change from $1=€1 to $2=€1 represents a. depreciation of the dollar b. an appreciation of the dollar c. a depreciation of the euro d. none of the above 4. A shortage of Euros with flexible exchange rates results in: a. a depreciation of the euro b. a depreciation of the dollar c. an appreciation of the dollar d. no change in the exchange rate 5. An effective exchange rate is a: a. spot rate b. forward rate c. a flexible exchange rate d. weighted average of the exchange rates between the domestic currency and the nation’s most important trade partners Chapter 12 1. If growth increased in the United States but not in the European Monetary Union (EMU) the dollar would: a. depreciate b. appreciate c. the dollar/euro exchange rate would remain unchanged d. any of the above 2. A more rapid increase in prices in the United States than in the European Monetary Union (EMU) would lead to a. a decrease in the U.S. demand for euros and an increase in the U.S. supply of euros b. an increase in the U.S. demand and supply of euros c. a decrease in the U.S. demand and supply of euros d. an increase in the U.S. demand for euros and a decrease in the U.S. supply of euros
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. An increase in the interest rate in the United States but not in the European Monetary Union would lead to a. an increase in the U.S. demand for euros and a decrease in the U.S. supply of euros b. an increase in the U.S. demand and supply of euros c. a decrease in the U.S. demand and supply of euros d. a decrease in the U.S. demand for euros and an increase in the U.S. supply of euros 4. The expectation that the U.S. will appreciate in the future would lead to a. a decrease in the U.S. demand for euros and an increase in the U.S. supply of euros b. an increase in the U.S. demand for euros and a decrease in the U.S. supply of euros
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/19/2012 for the course ECON 215 taught by Professor Rodgers during the Three '08 term at University of Wollongong, Australia.

Page1 / 5

ECON216_Spring2011_T - Review MCQs 13 14 and 15 Chapter 11 1 Which is not a function of the foreign exchange market a to transfer funds from one

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online