The Purchasing Power Parity theory assumes that Question 26 Not yet answered Points out of 1.0 Flag question Select one: a. exchange rates are only influenced by relative inflation rates across countries O b. transportation costs exist and most be accounted for o c tariffs exist and most be accounted for O d. goods vary from country to country Regarding the FX market, Question 27 Not yet answered Points out of 10 Flag question Select one: O a. the demand curve slopes downward to the right b. the supply curve slopes downward to the right O there is an increased demand for a currency at higher exchange rates d. there is a Increased supply of a currency at lower exchange rates Question 28 If we saw an exchange rate quote AUD/USD 0.7847, this would mean Not yet answered Points out of 1.0 Flag question Select one: a. One Australian dollar would buy 0.7847 US dollars. b. One US dollar would buy 0.7847 Austra ian dollars. c. One Australian dollar would buy 1.2744 US dollars o. The same as USD/AUD 0.7847 Cuen 29 In the X market anith Points out of 1.0 F Flag question oa. One Australian dollar would buy 0.7847 US dollars. O b. One US dollar would buy 0.7847 Australian or O C One Australian dollar would buy 1.2744 US dollars d. The same as USD/AUD 0.7847 In the FX market, when the EUR/CHF rate went from 1.2001 to 0.9775, this meant that Question 29 Not yet answered Points out of 1.0 P Flag question Select one: a. the euro depreciated relative to the Swiss franc b. the euro appreciated relative to the Swiss franc o c the Swiss franc depreciated relative to the euro d. one euro could buy more Swiss francs Question 30 If the U.S. sells $150 million of wheat to Brazil in return for $200 million of Brazilian oil, the $50 million difference will necessarily Not yet answered Points out of 10 Flag question Select one: A. be balanced by other transactions in the US. Balance of Payments account OB. never be paid back, resulting in a $50 million loss for Brazil OC. require the sale $50 million more wheat to Brazillater on O D. obligate the U.S. to provide $50 million in foreign aid to Brazil. Previous page here to search