MULTIPLE (3.5 each If the dollar increases in value relative to the euro, then:

Question

MULTIPLE (3.5 each If the dollar increases in value relative to the euro, then: A. the dollar has appreciated relative to the euro B. the euro has depreciated relative to the dollar C. Both A. and B. D. Neither A. nor B. 1. 2. If an American firm quotes the dollar's increase from euroo.95/S to euro1.03/S, this is a (an): A. B. C. D. E. Direct quote Indirect quote Depreciation of the dollar relative to the euro Both A. and C. Both 8. and C. 3. From the viewpoint of a European firm, what is the percentage increase (decrease) in the dollar for the scenario in Question #2? A, the dollar has appreciated by 8.42% relative to the euro B. the dollar has depreciated by 8.42% relative to the euro C, the dollar has appreciated by 9.53% relative to the euro D. the dollar has depreciated by 9.53% relative to the euro . Which of the following is NOT a factor that influences the change in an exchange rate's spot rate? A. the change in relative income levels B. the change in relative inflation rates C. the change in government controls D. The change in expectations of future exchange rates E. All of the above are factors that influence the change in the spot rate 5. What happens to the value of the British pound relative to the dollar if there is a decrease in U.S. inflation rate A. A decrease in U.S. demand for the pound, increasing the value of the pound B. A decrease in the supply of pounds put of the market by Great Britain, decreasing the value of the pound C. A decrease in U.S. demand for the pound, decreasing the value of the pound D. A decrease in the supply of pounds put of the market by Great Britain, increasing the value of the pound

Explanation / Answer

Answer 1- (C) Both A & B

Answer 2- (E) Both B & C

Answer 3- (B) The dollar has depriciated by 8.42% relative to euro

Answer 4- (E) all of the above are factors that affect change in spot rate

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