a) The net decline in a country\'s stock of international reserves over a year i
ID: 1099223 • Letter: A
Question
a)The net decline in a country's stock of international reserves over a year is called what ?
b)
Foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market is called what ?
c)
The theory that nominal exchange rates are determined as necessary for the law of one price to hold is called what ?
d)
An international monetary system under which most countries pegged their currencies to the U.S. dollar; it operated from the end of World War II until 1971 is called what ?
e)
The nominal exchange rate between the currencies of two countries adjusted for changes in the relative price levels in the two countries since a base year is called what ?
f)
The market on which currencies of various nations are traded for one another is called ?
g)
If transportation costs are relatively small, the price of an internationally traded commodity will be the same in all locations is called what ?
h)
The exchange rate that equates the quantities of the currency supplied and demanded in the foreign exchange market is called what ?
i)
An exchange rate that has an officially fixed value less than its market equilibrium value is called what ?
j)
_____ Refers to the situation when one unit of one currency trades on the foreign exchange market for one unit of another currency; frequently abbreviated to "par".
a)
The net decline in a country's stock of international reserves over a year is called what ?
Explanation / Answer
A.) Balance-of-payments deficit
B.) International Reserves
C.) Purchasing Power Parity (PPP)
D.) Bretton Woods agreement
E.) Real exchange rate
F.) Foreign exchange market
G.) Law of one price
H.) Fundamental value of the exchange rate
I.) Undervalued Exchange Rate
J.) Parity
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