This quiz works best with JavaScript enabled. Home > Economics > International > Currency > Foreign Currency Markets – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Foreign Currency Markets Quiz 6 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Decreased government spending would result in A) A lower discount rate. B) Higher prices. C) Higher reserve amount. D) Lower taxes. Show Answer Correct Answer: D) Lower taxes. 2. The extent to which a firm's future international earning power is affected by changes in exchange rates A) Economic exposure. B) Translation exposure. C) Transaction exposure. D) None of above. Show Answer Correct Answer: A) Economic exposure. 3. Forex is qouted in currency pairs. Each currency is given a 3-letter code.What country code is this:NZD A) New Zealand Development. B) New Zealand. C) New Zealand Department. D) New Zealand Dollar. Show Answer Correct Answer: D) New Zealand Dollar. 4. Everything else held constant, increased demand for a country's ..... causes its currency to appreciate in the long run, while increased demand for ..... causes its currency to depreciate. A) Exports; exports. B) Imports; exports. C) Imports; imports. D) Exports; imports. Show Answer Correct Answer: D) Exports; imports. 5. The government issues currency and coins to A) Promote global trade. B) Control exchange of goods and services. C) Promote monopolies. D) Help make exchange of goods and services easier. Show Answer Correct Answer: D) Help make exchange of goods and services easier. 6. The relative of income level and forex is A) Income decrease, Dd for foreign product will decrease. B) Interest rate constant, Dd for domestic product will increase. C) Income increase, Dd for foreign product will increase. D) None of above. Show Answer Correct Answer: C) Income increase, Dd for foreign product will increase. 7. Which of the following is a source of FOREX supply A) Imports. B) Exports. C) Direct purchase in abroad. D) None of above. Show Answer Correct Answer: B) Exports. 8. The base currency has a value of ..... ? A) 0.1. B) 10000. C) 100. D) 1. Show Answer Correct Answer: D) 1. 9. When domestic currency loses its value in relation to a foreign currency in the international money market, it is a situation of: A) Currency appreciation. B) Currency depreciation. C) Currency devaluation. D) None of these. Show Answer Correct Answer: B) Currency depreciation. 10. Which components that participants in money market?i. Bank Negara Malaysiaii. Non-Banking Institutionsiii. Tourismiv. Real Estate A) I and iv. B) Iii and iv. C) I and ii. D) None of above. Show Answer Correct Answer: C) I and ii. 11. When the value of the British pound changes from C$ 1.25 to C$ 1.50, the pound has ..... and the Canadian dollar has ..... A) Depreciated; appreciated. B) Appreciated; appreciated. C) Appreciated; depreciated. D) Depreciated; depreciated. Show Answer Correct Answer: C) Appreciated; depreciated. 12. The situations when the price changes are ..... A) Stability. B) Challenging circumstances. C) Fluctuations. D) None of above. Show Answer Correct Answer: C) Fluctuations. 13. The supply curve of a foreign exchange is: A) A straight line slopped from left to right. B) Rectangular hyperbola curve. C) Positively slopped from left to right. D) Negatively slopped from left to right. Show Answer Correct Answer: C) Positively slopped from left to right. 14. Foreign exchange involve monetary transaction A) Among residents of the same country. B) Between residents of two different countries. C) Between residents of two or more countries. D) None of the above. Show Answer Correct Answer: B) Between residents of two different countries. 15. What is money market? A) Market for short term mobilization of funds among market participant. B) An instrument has maturity date and issuer will have to refund the principal to investor. C) Market that did not provide facility for participants in financial system. D) None of above. Show Answer Correct Answer: A) Market for short term mobilization of funds among market participant. 16. In the world of spot markets, what is the meaning of immediately? A) Three days after the trade date. B) On the trade date. C) Two days after the trade date. D) Simultaneous due to electronic transfers. Show Answer Correct Answer: C) Two days after the trade date. 17. Forward exchange rate is the rate: A) Which happens to prevail in the future. B) Which happens to clear the current transaction. C) At which market demand for foreign currency = market supply of foreign currency. D) At which forward transactions are to be honoured. Show Answer Correct Answer: D) At which forward transactions are to be honoured. 18. Identify the second most traded currency around the world. A) US Dollars. B) Indian Rupee. C) Yuan. D) Euro. Show Answer Correct Answer: D) Euro. 19. There are 3 reasons for intervention, one of them are, A) High trade of exchange rate. B) Establish implicit exchange rate boundaries. C) Fluctuate of Income Level. D) React to permanent disturbances. Show Answer Correct Answer: B) Establish implicit exchange rate boundaries. 20. How can the government of foreign country influence the equilibrium exchange rate? A) Impose forex barriers. B) Impose foreign trade barriers. C) Intervene by buying and selling currency. D) All above. Show Answer Correct Answer: D) All above. 21. An increase in the foreign interest rate causes the demand for domestic assets to shift to the ..... and the domestic currency to ....., everything else held constant. A) Left; appreciate. B) Left; depreciate. C) Right; depreciate. D) Right; appreciate. Show Answer Correct Answer: B) Left; depreciate. 22. Direct foreign investment is a source of- A) Demand for foreign exchange. B) Supply of foreign exchange. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 23. If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with A) Yuan. B) International monetary credits. C) Dollars. D) Euros. Show Answer Correct Answer: A) Yuan. 24. Who regulates the foreign trade in India A) RBI-Reserve Bank of India. B) DGFT-Director General of Foreign Trade. C) FEDAI-Foreign Exchange Dealers Association of India. D) SEBI-Securities & Exchange Board of India. Show Answer Correct Answer: A) RBI-Reserve Bank of India. 25. In April 2000, one U.S. dollar traded on the foreign exchange market for about 7.2 French francs. Therefore, one French franc would have purchased about A) 4.10 U.S. dollars. B) 0.41 U.S. dollars. C) 1.40 U.S. dollars. D) 0.14 U.S. dollars. Show Answer Correct Answer: D) 0.14 U.S. dollars. ← PreviousRelated QuizzesInternational QuizzesEconomics QuizzesForeign Currency Markets Quiz 1Foreign Currency Markets Quiz 2Foreign Currency Markets Quiz 3Foreign Currency Markets Quiz 4Foreign Currency Markets Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books