1、A)The countrys monetary authorities were selling foreign currency.B)The countrys monetary authorities were buying foreign currency.C)The countrys monetary authorities were buying domestic currency.D)The countrys monetary authorities were buying imported goods.4. Suppose that a Korean television set
2、that costs 600 won in Korea costs $400 in the United States. These prices suggest that the exchange rate between the won and the dollar is:A)1.5 won per dollarB)0.75 won per dollarC)$1.50 per wonD)$3 per won5. To the US, U.S. capital inflows will create a _ foreign currency and a _ U.S. dollars.A)De
3、mand for; supply ofB)Supply of; demand forC)Shortage of;D)Supply of; shortage of6. U.S. imports of goods and services will create a _ foreign currency and a _ U.S. dollars. A) Demand for;B) Supply of;C) Shortage of;D) Supply of;7.If the spot price of the euro is $1.10 per euro and the 30-day forward
4、 rate is $1.00 per euro, and you believe that the spot rate in 30 days will be $1.05 per euro, you can maximize speculative gains by:A)Buying euros in the spot market and selling the euros in 30 days at the future spot rate.B)Signing a forward foreign exchange contract to sell the euros in 30 days.C
5、)Signing a forward foreign exchange contract to sell the dollars in 30 days.D)Buying dollars in the spot market and selling the dollars in 30 days at the future spot rate.8.Assume you are a Chinese exporter and expect to receive $250,000 at the end of 60 days. You can remove the risk of loss due to
6、a devaluation of the dollar by:A)Selling dollars in the forward market for 60-day delivery.B)Buying dollars now and selling it at the end of 60 days.C)Selling the yuan equivalent in the forward market for 60-day delivery.D)Keeping the dollars in the United States after they are delivered to you.9. T
7、he interest rate in the U.K. is 4% for 90 days, the current spot rate is $2.00/ and the forward rate is $1.96/. If the covered interest rate differential is about 1%, then the interest rate in the U.S. for 90 days would have to be:A)7%B)4%C)3%D)2%10. If the covered interest differential is zero:A)In
8、ternational investments will be unprofitable.B)Parity has not been reached.C)The overall covered return on a foreign-currency investment equals the return on a comparable domestic-currency investment.D)A currency is at a forward premium by as much as its interest rate is higher than the interest rat
9、e in the other country.11. When uncovered interest parity holds:A)A currency is expected to appreciate by as much as its interest rate is lower than the interest rate in the other country.B) A currency is expected to appreciate by as much as its interest rate is higher than the interest rate in the
10、other countryC) A currency is expected to depreciate by as much as its interest rate is lower than the interest rate in the other countryD)The forward premium equals the interest rate differential.12. International Fisher Effect refers to the condition when:A)Covered differential equals zero.B)Expec
11、ted uncovered differential equals zero.C)Uncovered interest parity holds.D)Both (B) and (C).13. _ purchasing power parity states that the difference between changes over time in product-price levels in two countries will be offset by the change in the exchange rate over this time. A)FullB)PartialC)R
12、elativeD)Absolute14. The _ approach to exchange rates emphasizes the importance of the supply and demand for money as a key to understanding the determinants of exchange rates. A)Purchasing-power-parityB)Asset marketC)MonetaryD)Balance of payments15. Based on PPP and the quantity theory of money, if
13、 Japans real income rises relative to real income in the US, there should be a(n):A)Appreciation of the dollar.B)Appreciation of the yen.C)Interest rate parity.D)Depreciation of the yen.16.The _ effect can sometimes be destabilizing because it moves the exchange rate away from its long-run equilibri
14、um value. A) BandwagonB) BubbleC) Exchange rateD) Arbitrage17. The law of _ states that a product that is easily and freely traded in a perfectly competitive global market should have the same price everywhere. A) International tradeB) One priceC) Diminishing returnsD) Relative PPP18.According to th
15、e relative version of purchasing power parity, when the foreign country inflation rate increases, the home countrys:A)Currency tends to depreciate.B)Currency tends to appreciate.C)Inflation rate tends to decrease.D)Inflation rate tends to stay the same.19.Which of the following are in place when gov
16、ernment imposes limits on or requires approvals for payments related to some (or all) international financial activities?A)Exchange controls.B)Capital controls.C)Official interventions.D)Adjustable pegs.20. Pressures in the foreign exchange market are such as to cause the British pound to appreciate
17、 with respect to the U.S. dollar. If Britain is trying to maintain a fixed exchange rate with respect to the U.S. dollar, which of the following interventions will stem the pressures for appreciation of the pound? A)Britain should sell pounds and buy dollars.B)Britain should do nothing as a fixed ra
18、te will not change.C)Britain should buy pounds and sell dollars.D)Britain should decrease their money supply to contract the economy.21. Faced with ever increasing outflows of gold in the late 1960s, the United States:A)Used contractionary fiscal policies to rid the nation of deficits.B)Devalued the
19、 dollar in terms of gold.C) Suspended the convertibility of dollars into gold.D) Imposed foreign exchange controls.22. .If the marginal propensity to save is 0.3 and the marginal propensity to import is 0.1, and the government increases expenditures by $10 billion, ignoring foreign-income repercussi
20、ons(回流效应), how much will GDP rise?A)$20 billion.B)$10 billion.C)$25 billion.D)$15 billion.23.The IS curve illustrates:A)All combinations of domestic output levels and interest rates for which the domestic product market is in equilibrium.B)All combinations of domestic output levels and interest rate
21、s for which the domestic money market is in equilibrium.C)All combinations of domestic output levels and interest rates that results in a zero balance for the countrys official settlements balance.D)All combinations of domestic output levels and interest rates for which there is full employment.24.T
22、he LM curve has a:A)Positive slope because a higher interest rate leads to a decrease in the demand for money and thus a higher level of domestic production is needed to cause people to continue to hold the same amount of money.B)Negative slope because a higher interest rate leads to a decrease in t
23、he demand for money and thus a higher level of domestic production is needed to cause people to continue to hold the same amount of money.C)Negative slope because a higher interest rate leads to a decrease in aggregate demand and thus a lower level of domestic production is needed for equilibrium.D)
24、Positive slope because a higher interest rate leads to a decrease in aggregate demand and thus a higher money supply is needed for equilibrium.25. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of domestic currency is under downward pressure:A)Cau
25、ses international reserve holdings to rise.B)Has no impact on the domestic money supply.C)Causes the domestic money supply to rise.D)Causes the domestic money supply to fall.26. Floating exchange rates ensure:A) Full employment domestically.B) Domestic price stability.C) Equilibrium in the overall b
26、alance of payments.D) A surplus in the trade balance.27. There are limits to the ability of monetary authorities to use sterilized intervention in the case of a surplus because:A)The central bank may be unwilling to increase its holdings of foreign currency.B) Pressure from foreign countries to allo
27、w the domestic currency to depreciate will lead to large losses.C)The central bank is limited in its ability to obtain foreign currency.D)There are no limits on the use of sterilized intervention.28. Under a floating exchange rate regime, following an expansion in the money supply, monetary authorit
28、ies will:A) Buy foreign currency in the foreign exchange market.B) Buy domestic currency in the foreign exchange market.C) Do nothing in the foreign exchange market.D) Sell domestic currency in the foreign exchange market.29.Given the IS-LM-FE framework and an overall payments balance of zero, if the country implements expansionary monetary policy, the LM curve will shift to the _ which will lead to the countrys currency _. In response, the FE and IS curves will shift to the _ and external balance will be reestablished. A) left; appreciating; rightB) left; depreciating; left C) right;D)
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