国际金融课后习题答案

TrueorFalse?

1.InMarch2002,PresidentBushimposedatariffofupto30percent

onsteelimportedintotheUnitedStates.

2.TheUnitedNationsisresponsibleforoverseeingthesystemof

rulesaboutinternationaltrade.

3.TheInternationalLaborOrganizationiseffectiveinenforcingits

corelaborstandardsindevelopingcountries.

4.Aboutaquarterofallchildreninthepoorestcountriesintheworld

workinthelaborforce.

5.Asof2002,twelvecountriesinEuropeusetheeuroastheir

currency.

6.Argentina'shyperinflationinthelate1980swasduetothe

government'spracticeofprintingcurrencyinordertopayfor

governmentspending.

7.Argentinasolvedthehyperinflationofthelate1980swith

dollarization.

8.Inlate2000,theWorldTradeOrganizationprovidedArgentinawith

a$14billionloan.

9.Acommoncurrencyamongneighboringcountriescanstimulate

tradeandreducecostsassociatedwithchangingcurrencies.

10.Whenpercapitaincomesinacountryreachapproximately$5000,

childlaborinthecountrybecomesalmostnonexistent.

Answer:

1.TRUE

2.FALSE

3.FALSE

4.FALSE

5.TRUE

6.TRUE

7.FALSE

8.FALSE

9.TRUE

10.TRUE

WhataretypicalreasonswhyMNCsexpandinternationally?

1.MNCscancapitalizeoncomparativeadvantage(suchasa

technologyorcostoflabor)thattheyhaverelativetofirmsinother

countries,whichallowsthemtopenetratethoseothercountries's

markets.Givenaworldofimperfectmarkets,comparativeadvantages

acrosscountiresarenotfreelytransferable.Therefore,MNCsmaybe

abletocapitalizeoncomparativeadvantages.ManyMNCSinitially

penetratemarketsbyexportingbutultimatelyestablishasubsidiary

inforeignmarketsandattempttodifferentiatetheirproductsasother

firmsenterthosemarkets.

(1)balanceofpayments

(2)capitalinflow

(3)merchandisetradebalance

(4)officialinternationalreserves

(5)capitaloutflow

(6)goodsandservicesbalance

(7)goods,services,andincomebalance

(8)currentaccountbalance

(9)capitalaccountbalance

(10)directinvestments

(11)netforeigninvestment

(12)officialsettlementsbalance

(13)internationalinvestmentposition

A)asystematicaccountofalltheexchangesofvaluebetweenresidentsofacountryandthe

restoftheworldduringagivenperiodoftime.

B)netcreditsminusnetdebitsonmerchandise

C)thechangeinanation'sforeignassetsminusforeignliabilities

D)anincreaseinanation'sliabilitiestoforeignresidentsoradecreaseinassetspreviously

obtainedfromothercountries.

E)netincomeflowsandnetexportsofgoodsandservices.

F)thenetaccumulationofforeignassetsminusforeignliabilities.

G)anyflowoflendingto,orpurchasesofownershipin,aforeignenterprisethatislargely

ownedbyresidentsoftheinvestingcountry.

H)netcreditsminusdebitsontheflowsofgoods,services,income,andunilateraltransfers.

I)netexportsofgoodsandservices.

J)anincreaseinanation'sassetsobtainedfromothercountriesoradecreaseinitsliabilities

toothercountries.

K)thesumofthecurrentaccountbalanceplustheprivatecapitalaccountbalance

L)moneylikeassetssuchasgoldthataregenerallyrecognizedasofficialassets

M)netcreditsminusdebitsinvolvingchangesinprivatenationalresidents'foreignfinancial

assetsandliabilities.

Answer:

1.balanceofpayments:asystematicaccountofalltheexchangesofvaluebetween

residentsofacountryandtherestoftheworldduringagivenperiodoftime.A)

2.capitalinflow:anincreaseinanation*sassetsobtainedfromothercountriesora

decreaseinitsliabilitiestoothercountries.J)

3.merchandisetradebalance:netcreditsminusnetdebitsonmerchandise.B)

4.officialinternationalreserves:moneylikeassetssuchasgoldthataregenerally

recognizedasofficialassets,L)

5.capitaloutflow:anincreaseinanation'sliabilitiestoforeignresidentsoradecreasein

assetspreviouslyobtainedfromothercountries.D)

6.goodsandservicesbalance:netexportsofgoodsandservices.I)

7.goods,services,andincomebalance:netincomeflowsandnetexportsofgoodsand

services.E)

8.currentaccountbalance:netcreditsminusdebitsontheflowsofgoods,services,income,

andunilateraltransfers.H)

9.capitalaccountbalance:netcreditsminusdebitsinvolvingchangesinprivatenational

residents'foreignfinancialassetsandliabilities.M)

10.directinvestments:anyflowoflendingto,orpurchasesofownershipin,aforeign

enterprisethatislargelyownedbyresidentsoftheinvestingcountry.G)

11.netforeigninvestment:thechangeinanation'sforeignassetsminusforeignliabilities.

C)

12.officialsettlementsbalance:thesumofthecurrentaccountbalanceplustheprivate

capitalaccountbalanceK)

13.internationalinvestmentposition:thenetaccumulationofforeignassetsminusforeign

liabilities.F)

2.Trueorfalse:

l.Acountrywithacurrentaccountsurplusissavingmorethanitsdomesticcapitalformation.

2.Acountry'sinternationalinvestmentpositionshowstheextentofofficialinterventioninthe

foreignexchangemarket.

3.Adebitonthebalanceofpaymentsrepresentsaflowforwhichthecountryispaid.

4.Ifyoureceivea£300checkfromyourauntinLondon,thevalueofthatcheckwillappear

intheunilateraltransferscategoryoftheU.S.balanceofpayments.

5.Overthelasttwentyyears,theU.S.merchandisetradebalancehastendedtobefurtherindeficit

thantheU.S.goodsandservicesbalance.

ANSWER:

l.TRUE2.FALSE.3FALSE4.TRUE5.TRUE

3.Choice:

1.TheU.S.currentaccountdoesnotinclude:

A)netexportsofgoods

B)U.S.grantstoforeigncountries.

C)thesaleofU.S.bondstoforeigners

D)incomereceiptsfromforeigners.

2.WhichisthefollowingisenteredasacreditintheU.S.balanceofpayments?

A)AconstructioncompanyintheU.S.imports$5millionsteelfromJapan

B)GoldleavestheU.S.Treasuryforanothercountry

C)AnAmericanautomanufacturerexports$56millionincarstoEurope

D)TheUnitedStatesgrants$4billioninaidtoRussia.

ANSWER

l.C2.C

MatchingQuiz

I.foreignexchange:

2.exchangerate

3.spotexchangerate

4forwardexchangerate

5.floatingexchangeratesystem:

6.fixedexchangeratesystem

7.depreciation

8.appreciation

9.devaluation

10.revaluation

11.arbitrage

12.triangulararbitrage

A)afallinthemarketpriceofafloatingcurrency

B)ariseinthemarketpriceofafloatingcurrency

C)thetradeofonenationalcurrencyforanother.

D)adiscreteofficialincreaseintheotherwisefixedparvalueofacurrency

E)theprocessofbuyingandsellingtomakea(nearly)risklesspureprofit

F)asysteminwhichtheexchangerateofacurrencyisdeterminedinthemarketplaceand

notbygovernmentorcentralbankintervention.

G)adiscreteofficialreductionintheotherwisefixedparvalueofacurrency

H)theprocessofmakingarisklessprofitbyarbitragingthroughthreeexchangerates.

I)thepricefor"immediate"exchange

J)thepriceforanexchangethatwilltakeplacesometimeinthefuture.

K)asysteminwhichofficialstrytokeeptheexchangerateofacurrencypeggedevenifthe

ratetheychoosediffersfromtheequilibriumrate.

L)thepriceatwhichtwonationalcurrenciesaretraded.

l.foreignexchange:thetradeofonenationalcurrencyforanother.C)

2.exchangerate:thepriceatwhichtwonationalcurrenciesaretraded.L)

3.spotexchangerate:thepricefor"immediate"exchangeI)

4forwardexchangerate:thepriceforanexchangethatwilltakeplacesometimeinthefuture

J)

5.floatingexchangeratesystem:asysteminwhichtheexchangerateofacurrencyis

determinedinthemarketplaceandnotbygovernmentorcentralbankintervention.F)

6.fixedexchangeratesystem:asysteminwhichofficialstrytokeeptheexchangerateofa

currencypeggedeveniftheratetheychoosediffersfromtheequilibriumrate.K)

7.depreciation.afallinthemarketpriceofafloatingcurrencyA)

8.appreciationsriseinthemarketpriceofafloatingcurrencyB)

9.devaluation:adiscreteofficialreductionintheotherwisefixedparvalueofacurrency

G)

10.revaluationadiscreteofficialincreaseintheotherwisefixedparvalueofacurrency

D)

11.arbitrage:theprocessofbuyingandsellingtomakea(nearly)risklesspureprofit

E)

12.triangulararbitragetheprocessofmakingarisklessprofitbyarbitragingthroughthree

exchangerates.H)

IfaBritishpoundequals12000Italianlira,whatistheBritishpoundequivalentofanItalian

lira?

CA)£0.0083

□B)£0.000083

CC)£1.83

CD)noneoftheabove

WhenaGermanbuysaU.S.Treasurybond,therewillbea(n):

CA)increaseinthedemandfordollars.

eB)increaseinthedemandformarks.

Cc)decreaseinthedemandfordollars.

CD)increaseinthesupplyofdollars.

AnappreciationintheU.S.dollarrefersto:

CA)anincreaseinthedollarpriceofaforeigncurrency.

亡B)adecreaseinthedollarpriceofaforeigncurrency.

CadecreaseintheforeigncurrencypriceoftheU.S.dollar.

巴D)noneoftheabove.

Answer:1.B;2.A;3.B

TrueorFalse

(Seerelatedpages)

TrueorFalse?Inafloatingexchangeratesystem,monetaryofficialswillbuyandsella

currencyinordertokeepitsexchangerateinanofficiallystipulatedband.

CA)TRUE

CB)FALSE

TrueorFalse?Itisfrequentlypossibleforindividualstogototheirlocalbankandcarryout

transactionssoastoprofitfromtriangulararbitrage.

CA)TRUE

CB)FALSE

TrueorFalse?Theterms"devaluation"and"revaluation"pertaintochangesinthepriceof

acurrencyinafloating-rateexchangeratesystem.

CA)TRUE

CB)FALSE

TrueorFalse?China,SaudiArabia,Egypt,andHongKongallhavecurrenciesthatare

fixedtotheU.S.dollar.

□A)TRUE

CB)FALSE

TrueorFalse?Thedollarisoftencalledavehiclecurrency.

CA)TRUE

CB)FALSE

1.7®FALSE

2./⑥FALSE

3./⑥FALSE

4.TRUE

5./⑥TRUE

TRUEORFALSE

1.Researchhasshownthatforcountrieswithoutcapital

controlsandforcomparableshort-termfinancialassets,

coveredinterestparityholdsalmostperfectly.

2.Theexpectedrateofappreciationofacurrencyshould

equalthepercentageamountbywhichthecountry's

interestrateislowerthantheothercountry'sinterestrate.

3.Coveredinternationalinvestmentoccurswhentherateat

whichthefuturesaleofforeigncurrencyislockedinnow

throughaforwardexchangecontract.

4.Speculatingistheactofbalancingassetsandliabilitiesin

aforeigncurrencyinordertobecomeimmunetorisk

resultingfromfuturechangesinthevalueofforeign

currency.

5.Internationalfinancialinvestmenthasdeclineoverthe

lastdecade.

l.T

2.T

3.T

4.F

5.F

A)whentheexchangerateatwhichanticipatedinvestmentreturnswillberedeemedisnot

determineduntilthetradeoccursatthefuturespotrate.

B)anetliabilityposition

C)governmentpoliciesthatlimittheabilityoffinancialinvestorstotransfermoneysinorout

ofthecountry.

D)theconditionwheretheforwardrateofacurrencyismorethanthespotratebythesame

percentagethatitsinterestrateislowerthantheothercountry'sinterestrate.

E)theactoftakinganetassetpositionoranetliabilitypositioninsomeforeigncurrency.

F)whenacurrencyisexpectedtoappreciatebyasmuchasitsinterestrateislowerthanthe

interestrateintheothercountry.

G)whentheexchangerateatwhichanticipatedforeigninvestmentreturnswillberedeemed

isdeterminedinthepresentthroughaforwardcontract.

H)anetassetposition

I)anagreementtoexchangeonecurrencyforanotheronsomedateinthefutureatthe

forwardexchangerate.

J)thedifferencebetweentherateofreturnsfrominvestingmoneyintheUSatthemarket

rateofinterestorparticipatinginthespotandforwardmarketsforU.S.dollarsand

anothercurrency.

K)buyingacountry'scurrencyspotandsellingitforward,whilemakingaprofitoffthe

combinationofhigherinterestratesinthatcountryandanyforwardpremiumonits

currency.

L)anagreementtosellacurrencytodaywiththeprovisionthatthecurrencywillberesold

later.

M)aninternationalinvestmentguru

N)theproportionatedifferencebetweenthecurrentforwardexchangeratevalueofa

currencyanditscurrentspotvalue.

O)theactofreducingoreliminatinganetassetornetliabilitypositionintheforeign

currency.?

1.hedging:E)theactoftakinganetassetpositionoranetliabilitypositioninsomeforeign

currency.

2.speculating:O)theactofreducingoreliminatinganetassetornetliabilitypositioninthe

foreigncurrency

3.forwardexchangecontract:!)anagreementtoexchangeonecurrencyforanotheron

somedateinthefutureattheforwardexchangerate.

4.coveredinternationalinvestment:G)whentheexchangerateatwhichanticipated

foreigninvestmentreturnswillberedeemedisdeterminedinthepresentthrougha

forwardcontract.

5.uncoveredinternationalinvestment:A)whentheexchangerateatwhichanticipated

investmentreturnswillberedeemedisnotdetermineduntilthetradeoccursatthefuture

spotrate.

6.coveredinterestdifferential:J)thedifferencebetweentherateofreturnsfrominvesting

moneyintheUSatthemarketrateofinterestorparticipatinginthespotandforward

marketsforU.S.dollarsandanothercurrency.

7.forwardpremiumN)theproportionatedifferencebetweenthecurrentforwardexchange

ratevalueofacurrencyanditscurrentspotvalue.

8.longposition:H)anetassetposition

9.shortposition:B)anetliabilityposition

10.coveredinterestarbitrage:K)buyingacountry'scurrencyspotandsellingitforward,

whilemakingaprofitoffthecombinationofhigherinterestratesinthatcountryandany

forwardpremiumonitscurrency.

11.coveredinterestparity:D)theconditionwheretheforwardrateofacurrencyismore

thanthespotratebythesamepercentagethatitsinterestrateislowerthantheother

country'sinterestrate.

12.uncoveredinterestparity:F)whenacurrencyisexpectedtoappreciatebyasmuchasits

interestrateislowerthantheinterestrateintheothercountry.

13.capitalcontrols:C)governmentpoliciesthatlimittheabilityoffinancialinvestorsto

transfermoneysinoroutofthecountry.

14.currencyswap:L)anagreementtosellacurrencytodaywiththeprovisionthatthe

currencywillberesoldlater.

15.GeorgeSoros:M)aninternationalinvestmentguru

Match:

A)wheninvestorsexpectthattherecenttrendinexchangerateswillcontinue.

B)anexchangeraterelativetooneotherspecificcountry

C)exchangesratesasquotedinforeignexchangemarkets

D)saysthattheexchangerateshouldbeequaltotheratioofthedomesticpriceleveltothe

foreignpricelevel.

E)thepriceofforeigngoodsintermsofcurrency-andprice-leveladjustedterms.

F)inanycountrythemoneysupplyisequatedwiththedemandformoney,whichisdirectly

proportionaltothevalueofGDR

G)whenthecurrencyexchangeratechangesbymuchmorethanwouldbeconsistentwitha

long-runstandardlikepurchasingpowerparity.

H)emphasizestheimportanceofmoneysuppliesanddemandsaskeytounderstandingthe

determinantsofexchangerates.

I)explainsexchangeratesasbeingpartoftheequilibriumforthemarketsforfinancial

assetsdenominatedindifferentcurrencies.

J)theweighted-averageexchangeratevalueofacountry'scurrency.

K)asinglecurrencywillhavethesamepriceeverywhere,oncethepricesatdifferenceplaces

areexpressedinthesamecurrency.

(1)purchasingpowerparity:D)saysthattheexchangerateshouldbeequaltotheratioof

thedomesticpriceleveltotheforeignpricelevel.

(2)monetaryapproachtoexchangerates:H)emphasizestheimportanceofmoney

suppliesanddemandsaskeytounderstandingthedeterminantsofexchangerates.

(3)lawofoneprice:K)asinglecurrencywillhavethesamepriceeverywhere,oncethe

pricesatdifferenceplacesareexpressedinthesamecurrency.

(4)quantitytheoryofmoney:F)inanycountrythemoneysupplyisequatedwiththe

demandformoney,whichisdirectlyproportionaltothevalueofGDR

(5)nominaleffectiveexchangerate:J)theweighted-averageexchangeratevalueofa

country'scurrency

(6)realbilateralexchangerate:B)anexchangeraterelativetooneotherspecificcountry

(7)realeffectiveexchangerate:E)thepriceofforeigngoodsintermsofcurrency-and

price-leveladjustedterms

(8)nominalbilateralexchangerate:C)exchangesratesasquotedinforeignexchange

markets

(9)assetmarketapproachtoexchangerates:I)explainsexchangeratesasbeingpartof

theequilibriumforthemarketsforfinancialassetsdenominatedindifferentcurrencies.

(10)Bandwagon:A)wheninvestorsexpectthattherecenttrendinexchangerateswill

continue

(11)exchangerateovershooting:G)whenthecurrencyexchangeratechangesbymuch

morethanwouldbeconsistentwithalong-runstandardlikepurchasingpowerparity.

CHOISE

Ifthelawofonepriceholds,thenwewouldexpectthatifonedollarexchangesforfour

yenandifacomputercosts$1000intheUnitedStates,theninJapan,thecomputer

shouldcost:

匕A)200。yen

CB)3000yen

C3250yen

CD)4000yen

Themonetaryapproachtoexchangeratesisgenerally:

CA)successfulinexplainingshort-andlong-runexchangerates.

successfulinexplainingshort-runexchangerates,butisbadat

□B)

explaininglong-runexchangerates.

successfulinexplaininglong-runexchangerates,butisbadat

Cc)

explainingshort-runexchangerates.

CD)badatexplainingshort-andlong-runexchangerates.

Whichofthefollowingisnotaplausible(似是而非的，貌似有理的)【错误】explanation

ofwhythevalueoftheJapaneseyengenerallyroseovertheperiod1970-1999?

亡A)inflationroseinJapanovertheperiod.

CB)Japanexperiencedsignificanteconomicgrowthovertheperiod.

CC)pricelevelsgrewveryslowlyinJapanovertheperiod.

LJapan'smoneysupplydidnotgrowmuchfasterthantherateof

匕n\

)economicgrowth.

Thequantitytheoryofmoneywouldpredictthata23%increaseinCountryA'smoney

supplyshouldeventuallyleadtoa:

CA)11.5%increaseinexchangeratevalueofthecurrency.

CB)11.5%decreaseintheexchangeratevalueofthecurrency.

Cc)23%increaseintheexchangeratevalueofthecurrency.

CD)23%decreaseintheexchangeratevalueofthecurrency.

PurchasingpowerparitypredictsthatwhenthedifferencebetweentheUnitedStates'

inflationrateandthatofanothercountryincreases:

CA)thedollarshouldappreciate.

CB)theforeigncurrencyshouldappreciate.

CC)theforeigncurrencyshoulddepreciate.

匕D)theexchangerateshouldstaythesame.

Purchasingpowerparityismoreaccurateinthelong-runthanintheshort-runbecause:

A)thequantitytheoryofmoneyisthemorelikelyshort-rundeterminant.

B)ittakestimeforcurrencymarketstoadjusttochangesinpricelevel.

thelawofonepriceonlyholdsintheshort-runandneverinthelong

CC)

run.

CD)noneoftheabove.

Whichofthefollowingisnotanaccuratedescriptionofalimitationofpurchasingpower

parity?

已PPPpredictsbestwhenlookingatthelargestmeasuresofpricelevel

A)suchastheCPI.

CB)PPPpredictsmoderatelywellatthelevelofalltradedgoods.

C(3)PPPpredictswellatthelevelofoneheavilytradecommodity.

CD)PPPpredictsbetteroverthelongrunthanintheshortrun.

Ifforeigninterestratesincrease,whatimplicationswouldthathaveonthedirectionof

internationalfinancialrepositioningandonthecurrentspotexchangerate?

repositioningtowardsdomesticcurrencyassetsandthedomestic

A)currencydepreciates

repositioningtowardsforeigncurrencyassetsandthedomestic

B)currencydepreciates

repositioningtowardsdomesticcurrencyassetsandthedomestic

C)currencyappreciates

repositioningtowardsforeigncurrencyassetsandthedomestic

D)currencyappreciates

Iftheexpectedfuturespotrateofacurrencydecreases,whatimplicationswouldthat

haveonthedirectionofinternationalfinancialrepositioningandonthecurrentspot

exchangerate?

repositioningtowardsdomesticcurrencyassetsandthedomestic

e)

Acurrencydepreciates

repositioningtowardsforeigncurrencyassetsandthedomestic

eB)

currencydepreciates

repositioningtowardsdomesticcurrencyassetsandthedomestic

匚C)

currencyappreciates

Lrepositioningtowardsforeigncurrencyassetsandthedomestic

L-in\

)currencyappreciates

10

repositioningtowardsdomesticcurrencyassetsandthedomestic

A)currencydepreciates

repositioningtowardsforeigncurrencyassetsandthedomestic

B)currencydepreciates

repositioningtowardsdomesticcurrencyassetsandthedomestic

C)currencyappreciates

repositioningtowardsforeigncurrencyassetsandthedomestic

D)currencyappreciates

1.D)4000yen

2.C)successfulinexplaininglong-runexchangerates,butisbadatexplainingshort-run

exchangerates.

3.A)inflationroseinJapanovertheperiod.

4.D)23%decreaseintheexchangeratevalueofthecurrency.

5.B)theforeigncurrencyshouldappreciate.

6.B)ittakestimeforcurrencymarketstoadjusttochangesinpricelevel.

7.A)PPPpredictsbestwhenlookingatthelargestmeasuresofpricelevelsuchastheCPI.

8.B)repositioningtowardsforeigncurrencyassetsandthedomesticcurrencydepreciates

9.C)repositioningtowardsdomesticcurrencyassetsandthedomesticcurrencyappreciates

10.C)repositioningtowardsdomesticcurrencyassetsandthedomesticcurrencyappreciates

method1:

Theovershootingwouldpredictthata23%increaseinCountryA'smoneysupplyshould

eventuallyleadtoa:

CA)11.5%increaseinexchangeratevalueofCountryA'scurrency.

巴B)11.5%decreaseintheexchangeratevalueofCountryA'scurrency.

Cc)23%increaseintheexchangeratevalueofCountryA*scurrency.

巴D)23%decreaseintheexchangeratevalueofCountryA'scurrency.

method2:

Thequantitytheoryofmoneywouldpredictthata23%increaseinforeignCountry's

moneysupplyshouldeventuallyleadtoa:

CA)11.5%increaseinexchangeratevalueofforeigncurrency.

CB)11.5%decreaseintheexchangeratevalueofforeigncurrency.

Cc)23%increaseintheexchangeratevalueofforeigncurrency.

CD)23%decreaseintheexchangeratevalueofforeigncurrency.

TUREORFALSE

1.Theassetmarketapproachexplainsexchangeratesasbeingpartoftheequilibriumforthe

marketsforfinancialassetsdenominatedindifferentcurrencies.

2.Iftheinterestratedifferentialincreases(i-if),thereturndifferentialshiftsinfavorof

domesticcurrencybonds,andcurrentspotexchangeratedecrease.

3.Relativepurchasingpowerparitystatesthatinternationalcompetitiontendstoequalizethe

homeandforeignpricesoftradedgoodsandservices.

4.Economicmodelshavebeenveryeffectiveinpredictingexchangerates.

5.Realexchangeratescanbeusedasanindicatorofdeviationsfrompurchasingpowerparity

orasanindicatorofacountry*sinternationalpricecompetitiveness.

1.TRUE;2.TRUE;3.FALSE;4.FALSE;5.TRUE

Devaluinganation'scurrencywillbeattractivetoallofthefollowingexcept:

foreigninvestors.

CA)

B)domesticexporters

C)foreignimporters

D)domesticimporters.

Whichofthefollowingisnotaviablewayforamonetaryauthoritytodefendafixed

exchangerate?

LBuyingandsellingofcurrenciesinordertoalterthesupplyanddemand

匕A)

7situationforthefixedcurrency.

LImposeexchangecontrolinordertoalterthesupplyanddemandsituationfor

7thefixedcurrency.

Cc)Alterdomesticinterestratestoinfluenceshort-termcapitalflows.

巴D)Adjustthemacroeconomytoalternonofficialsupplyanddemand.

CE)Alloftheabovework.

Defenseofacurrencyusingexchangecontrols:

□A)createslosses

巴B)hashighadministrativecosts

CC)willfosterthedevelopmentofblackmarketinthecurrency

willcausea,b,andc.

CD)

Developingcountriestendtohave:

匕A)floatingexchangerates.

巴B)peggedexchangerates.

Cc)noexchangerate.

CD)continuedwiththeBrettonWoodsSystem.

IntheperiodbeforeWorldWarI,theexchangeratesystemthatexistedwasthe:

CA)LimitedAnarchySystem.

CB)BrettonWoodsSystem.

Cc)GoldStandard.

UD)noneoftheabove

1.D,2,E,3.D,4,B,5.C

2.TrueorFalse

(Seerelatedpages)