Under managed floating exchange rates, if the rate of inflation in the United States is less than the rate of inflation of its trading partners, the dollar will likely
| A. | appreciate against foreign currencies |
| B. | depreciate against foreign currencies |
| C. | be officially revalued by the government |
| D. | be officially devalued by the government |
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Option: A Explanation : Click on Discuss to view users comments. |
The role of ____ is to direct one nation's savings into investments of another nation
| A. | merchandise trade flows |
| B. | services flows |
| C. | current account flows |
| D. | capital flows |
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Option: D Explanation : Click on Discuss to view users comments. |
Speculators in foreign exchange markets do all of the following except
| 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 |
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Option: D Explanation : Click on Discuss to view users comments. toran verma said: (7:15am on Tuesday 31st March 2015)
Arbitragers do so..
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Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called
| A. | differential actions |
| B. | cash transactions |
| C. | arbitrage |
| D. | forward transactions |
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Option: C Explanation : Click on Discuss to view users comments. |
In the balance of payments, the statistical discrepancy is used to
| A. | insure that the sum of all debits matches the sum of all credits |
| B. | insure that trade imports equal the value of trade exports |
| C. | obtain an accurate account of a balance-of-payments deficit |
| D. | obtain an accurate account of a balance-of-payments surplus |
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Option: A Explanation : Click on Discuss to view users comments. |
