1.An exchange rate system in which the government or central bank has agreed to convert its currency into another
at a fixed rate is called a:
A.floating exchange rate.
B.forced market rate.
C.fixed exchange rate.
D.managed float.
2.A dirty or managed float is:
A.a yearly summary of all the economic transactions between residents of one country and residents of the rest of the world.
B.the sum of the balance of trade, net income on capital held abroad, and net transfer payments.
C.a currency whose value is not pegged, but governments will intervene extensively in the market to keep the value within a certain range.
D.the price of one currency in another currency.
3.Currency held by governments is part of the:
A.official reserves account.
B.capital account.
C.Treasury direct account.
D.current account.
4.An appreciation of the Mexican peso would most likely be a result of:
A.a decrease in Mexican exports to the United States.
B.an increase in the supply of pesos.
C.an increase of foreign investment in Mexico.
D.a decrease in Mexican imports in the United States.
5.An exchange rate is:
A.a yearly summary of all the economic transactions between residents of one country and residents of the rest of the world.
B.the sum of the balance of trade, net income on capital held abroad, and net transfer payments.
C.the price of one currency in terms of another currency.
D.a currency whose value is not pegged but governments will intervene extensively in the market to keep the value within a certain range.
6.Foreign portfolio investment is included in the _____ account.
A.current
B.direct investment
C.trade
D.capital
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