Foreign Exchange Market

What is Foreign Exchange Market?

• a place where corporation and government can raise fund

• a market for converting currency of one country into another country

• trading of instrument by an exchange of securities

Purpose of the Forex market is to encourage international investment and trade.

• False

• Trues

If Malaysia inflation rate decrease, what will happen in the demand of us goods and services?

• Decrease

• Increase

How can the government of foreign country influence the equilibrium exchange rate?

• impose forex barriers

• Impose foreign trade barriers

• Intervene by buying and selling currency

• All above

Expectation is when foreign exchange market react to any news that may have future effect.

• True

• False

Below are factors that affecting forex rates.

a. Relative Price Level

b. Relative Inflation Rate

c. Relative Income Level

d. Government Expenditure

e. Relative to GDP

f.

• a,b,c

• a,c,d

• b,c,d

• All above

There are 3 reasons for intervention, one of them are,

• React to permanent disturbances

• Fluctuate of Income Level

• Establish implicit exchange rate boundaries

• High trade of exchange rate

The relative of income level and forex is

• Income decrease, Dd for foreign product will decrease

• Interest rate constant, Dd for domestic product will increase

• Income increase, Dd for foreign product will increase

Relative Income Level is

• positively related

• negatively related

What is Safwah's full name?

• Safwah Binti Ahmad Ruslan

• Nurul Safwah Binti Mohd Ruslan

• Ahmad Safwah Binti Abdul Ruslan

• Nur Safwah Binti Ruslan