PLEASE ANSWER ALL

q1. Which of the following statement is correct?

a. Inflation at home and depreciation abroad may occur if the central bank contracts the money supply at a faster rate than the growth in money demand.

b.All the answers are incorrect.

c.By simultaneously selling euros and purchasing the U.S. dollars, the European Central Bank (ECB) can reduce the value of the euro against the U.S. dollar.

d.The central bank can raise or lower interest rates or change the exchange rate to adjust to economic shocks with the dollarization.

e. Empirical evidence supports that countries with high central banks dependence to their government are tend to have lower and less volatile inflation rates.

q2.Which of the following statement is correct?

a. An increase in value is called devaluation when the government determines the stated par value of a pegged currency.

b.When the higher money supply causes inflation in the United States, the Eurozone consumers are likely to buy fewer U.S. products.

c.When the value of euro increases, the dollar cost of Eurozone products decreases as well.

d.When a government determines the stated par value of a pegged currency, a decrease in value is called revaluation.

e.All the answers are incorrect.

q3. Which of the following statement is incorrect?

a. Most of the answers are correct.

b.The inflation goes up if the central bank increases money supply excessively.

c.If the value of the euro decreases, Americans will demand less euros to buy the Eurozone products.

d.Higher prices in the United States will lead American consumers to substitute Eurozone imports for U.S. products.

e.Exchange rate is said to be a simple relation of two financial assets since a currency is considered to be a financial asset.

q4.Which of the following statement is correct?

a. All the answers are incorrect.

b.Exchange rates also are never affected by expectations of future currency changes, which depend on forecasts of future economic and political conditions.

c.The healthier the economy is, the weaker the currency is likely to be.

d.Nations with strong economic growth prospects will see substantial inflow of capital and stronger currencies.

e.A nation with poor economic growth will attract more investment capital leading to a stronger currency, other things being equal.

q5. Which of the following statement is incorrect?

a.Empirical evidence supports that countries with high central banks dependence on their government tend to have higher and more volatile inflation rates.

b.Most of the answers are correct.

c.A decrease in value is called devaluation when the government determines the stated par value of a pegged currency.

d.A nation with poor economic growth will not attract sufficient investment capital leading to a weak currency, other things being equal.

e.High-risk currencies those associated with more politically and economically stable nations are more highly valued than low-risk currencies.