Quiz 7

The rate at which one currency is traded for another is called ______________.

 
 
 

Currencies like MRF and US$ cannot be bought and sold because they are not like other commodities.

 
 

If a country has a floating exchange rate system, the value of the currency is determined freely by the forces of demand and supply with no _______________ intervention.

 
 
 
 

When the value of the local currency goes down in a ___________ exchange rate system, it is known as a depreciation.

 
 

A sustained balance of trade deficit over the years will lead to depreciation of the local currency.

 
 

In a ____________ exchange rate system, a country pegs the local currency to a foreign currency or a basket of currencies.

 
 

What is an exchange equalization account?

 
 
 

Speculators try to gain profit from predicting what might happen to the value of the money in the future.

 
 

An increase in the value of the local currency in a floating exchange rate system is known as an _____________.

 
 
 
 

In a pegged system, when the central bank raises the value of the currency, it is known as a _____________.

 
 
 
 

Question 1 of 10

 

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