1. A ________ exchange rate is the quoted price for a unit of foreign currency t
ID: 2713856 • Letter: 1
Question
1. A ________ exchange rate is the quoted price for a unit of foreign currency to be delivered within a very short period of time.
a. foward
b. spot
2. The Government does not set a _______ exchange rate, which means that supply and demand in the market determine the currency's value.
a. pegged
b. floating
3. When American customers import more from Europe than they export to Europe, the euro ________relative to the dollar.
a. apprecaites
b. depreciates
4. The ___________ of a currency refers to an increase or decrease of the stated par value of a currency whose value is fixed.
a. depreciation or appreciation
b. devaulation or revaluation
5. Under a _____________ floating regime, the government plays a significant role in managing the exchange rate by manipulating the currency's supply and demand.
a. freely
b. managed
6. Currencies under such a regime are _________ currencies.
a. convertible
b. non convertible
Explanation / Answer
1. Spot Rate
Spot rate is quoted for very short period of time.
2. Floating
Floating Exchange Rate are determined by demand and supply.
3. Appreciates
The reason is that import is more in america so they require more euro to pay for import.
4. Devaluation or revaluation
Changes in the value of the currency is known as devaluation or revaluation.
5. Managed.
In this system government play a significant role.
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