QUESTION 13

1. The world's largest currency trading market is

a.

Frankfurt

b.

New York

c.

Tokyo

d.

London

QUESTION 14

1. Let the inflation rate in Belize be 3.3%. At the same time, the inflation rate in the U.S. is 2.9%. According to PPP, the Belize dollar (BBD) should ___________ by _________%.

a.

depreciate; 0.387%

b.

appreciate; 1.387%

c.

depreciate; 1.387%

d.

appreciate; 0.387%

QUESTION 15

1. From the U.S. standpoint, a capital outflow will occur when a Japanese investor buys a portion of the U.S. government debt.

True

False

QUESTION 16

1. When exchange rates are quoted as the number of U.S. dollars per unit of foreign currency, it is referred to as

a.

American terms

b.

fixed-exchange terms

c.

spot-market terms

d.

European terms