Currency Trading – GZMEIDA.COM

1-When the government in a small open economy reduces national saving, the equilibrium real exchange rate
A. falls and net exports rise. C. rises and net exports rise.
B. falls and net exports fall. D. rises and net exports fall.

2-Which of the following is the best definition of the nominal exchange rate?
A. The rate at which a person can trade the currency of one country for the currency of another
B. The price of a good in one country divided by the price of the same good in another country
C. The nominal interest rate in one country divided by the nominal interest rate in another country
D. The rate at which a person can trade the goods of one country for the goods of another

3-Which of the following statements is correct?
A. In the market for loanable funds, net capital outflow is the source of demand; in the market for foreign-currency exchange, net capital outflow is the source of supply.

B. In the market for loanable funds, net capital outflow is the source of supply; in the market for foreign-currency exchange, net capital outflow is the source of demand.
C. In the market for loanable funds, net capital outflow is a piece of demand; in the market for foreign-currency exchange, net capital outflow is the source of supply.
D. In the market for loanable funds, net capital outflow is the source of supply; in the market for foreign-currency exchange, net capital outflow is a piece of demand.

1 – D. rises and net exports fall.

2 – A. The rate at which a person can trade the currency of one country for the currency of another

3 – C. In the market for loanable funds, net capital outflow is a piece of demand; in the market for foreign-currency exchange, net capital outflow is the source of supply.

Category: Foreign Currency Exchange Trading by admin