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International Economics Flashcards | StudBud
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International Economics
International Economics
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1
All are reasons that the gov. might interfere with the exchange rate except:
to reduce demand for imported goods
to improve unemployment
to stabilize the economy
to improve current account deficit
2
What is an exchange rate?
the amount of money it costs to trade an item
how one currency is converted to another
the rate at which goods are imported
the rate at which a country counts its currency
3
What is a big disadvantage of a low exchange rate?
More Exports than Imports
Inflation
Greater Employment
4
occurs when the price of a currency in a fixed exchange rate system officially increases
uprising
reevaluation
devaluation
5
Which type of exchange rate is set by foreign-exchange market through supply and demand?
Fixed Exchange Rate
Exchange Rate
Floating Exchange Rate
Sinking Exchange Rate
6
What happens to exports and imports during appreciation?
Exports become cheaper, while imports are more expensive.
Exports become expensive, while imports become cheaper
7
What is the third main type of exchange rate (besides floating and fixed)?
Steady
Managed
Stable
National
8
In a direct quotation, the price of a unit of foreign currency is expressed in terms of...
Foreign Currency
Domestic Currency
9
Where the government intervenes in the foreign exchange market to influence the exchange rate
Fixed Exchange Rate
Manage Exchange Rate System
Floating Exchange Rate
10
Exchange rate can also be categorized by the current rate, also known as the
Spot Rate
Middle Rate
Forward Rate
Declining Rate
