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If lots of people want euros and euros are in short supply, and a few people want Japanese yen and yen are in plentiful supply, the euro is likely...

1. If lots of people want euros and euros are in short supply, and a few people want Japanese yen and yen are in plentiful supply, the euro is likely to ______ against the yen. (Points: 1)
depreciate
appreciate
fall
stabilize


2. When residents and nonresidents rush to convert their holdings of domestic currency into a foreign currency, _______ occurs. (Points: 1)
the bandwagon effect
foreign exchange flight
the Asian flu
capital flight


3. The rate at which one currency is converted into another is called the _____. (Points: 1)
replacement percentage
resale rate
exchange rate
interchange ratio


4. A range of barter-like agreements by which goods and services can be traded for other goods and services is known as (Points: 1)
countertrade
barter
intermediate sales
countersale


5. The foreign exchange market is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications systems. (Points: 1)
True

False



6. The great strength of the gold standard was that it contained a powerful mechanism for simultaneously obtained ______ for all countries. (Points: 1)
balance-of-trade equilibrium
economic stability
interest rate parity
equal tariff levels


7. Under the Bretton Woods, all countries fixed the value of their currency in terms of (Points: 1)
the British pound
the euro
the U.S. dollar
gold


8. According to critics, the IMF's rescue efforts are exacerbating (Points: 1)
high interest rates
unstable currencies
moral hazard
deteriorating economic conditions


9. ______ rate systems all require some degree of government intervention in the foreign exchange market to maintain the value of the currency. (Points: 1)
Floating exchange rates, indirect exchange rates, and direct exchange
Dirty floats, pegged exchange rates, and floating exchange
Direct exchange rates, dirty floats, and indirect exchange
Pegged exchange rates, dirty floats, and fixed exchange


10. Which of the following currencies follows a pegged exchange rate system? (Points: 1)
the Australian dollar
the British pound
the Chinese Yuan
the Japanese Yuan


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