Economics MCQs

A. Decrease; depreciate
B. Decrease; appreciate
C. Increase; depreciate
D. Increase; appreciate

A. A depreciation of a currency
B. A strengthening of a currency
C. A floating of a currency
D. An appreciation of a currency

A. Price feedback theory
B. Trade feedback theory
C. J-curve theory
D. Purchasing power parity theory

A. Hard currency
B. Foreign exchange
C. Reserve currencies
D. Near monies

A. Adopted a new system of fixed exchange rates
B. Gave up trying to fix exchange rates formally and began allowing them to be determined essentially by supply and demand
C. Adopted single internationally accepted currency whose use is limited to international transactions
D. Returned to the gold standard

A. As the money supply is decreased the interest rate will increase and the price of uk exports will rise and the price of uk imports will fall
B. As the money supply is decreased the interest rate will increase, and the price of uk exports will fall and the price of uk imports will rise
C. As the money supply is decreased the interest rate will increase and the price of uk exports and uk imports will fall.
D. As the money supply is decreased the interest rate will increase and the price of both uk exports and uk imports will rise

A. Tends to lead to an appreciation of a nation’s currency
B. Tends to lead to a depreciation of a nation’s currency
C. Usually has no effect on a currency’s exchange value
D. Tends to lead to a depreciation of the currencies of other nations

A. Currency arbitrage
B. Interest arbitrage
C. Short positions
D. Long positions

A. Reflects only the influences of merchandise or real trade on the dollar’s exchange value
B. Reflects only transactions in the currency futures market
C. Is the weighted average of the dollar exchange rate relative to the currencies of important u.s trading partners adjusted for inflation?
D. Is the weighted average of the dollar exchange rate relative to the currencies of important u.s trading partners unadjusted for inflation?

A. Attempt to profit by trading on expectations about future currency prices
B. Bear risk as they attempt to ____ beat the market||
C. Attempt to buy currency at a low price and later resell that currency at a higher price
D. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit