Quizizz 5

We have discussed the USD's role in international trade. Imagine a situation where a new technology disrupts global supply chains, causing widespread transportation delays and increasing shipping costs. How might this scenario MOST LIKELY impact the USD Index in the short term?

• The USD Index would likely experience a significant increase as the USD becomes a more attractive safe-haven asset.

• The USD Index would likely experience a sharp decline due to the disruption in international trade.

• The impact on the USD Index would be negligible as long as the US economy remains strong

• The USD Index would likely experience a slow and steady decrease as the market gradually adjusts to the new technology.

Answer explanation

A major disruption in global supply chains would likely decrease demand for imported goods (since they become more expensive and harder to obtain). This could weaken the USD as the demand for foreign currencies to purchase these goods declines.

The USD Index is an important indicator for which of the following markets? (Choose ALL that apply)

• Foreign Exchange Market (Forex)

• Real estate market

• Financial market, including stocks and bonds

• Domestic labor market in the United States

What is the main purpose of the USD Index?

• To track the value of the USD compared to a basket of major currencies.

• To set the official exchange rate between the USD and other currencies.

• To measure the inflation rate in the United States.

• To control the interest rates set by the Federal Reserve.

FED stands for:

• Funds Exchange Demand

• Federal Reserve System

• Federal Reserve Demand

• Federal Reserve Bank

The price of oil is the monetary value of a …… of crude oil.

• Bowl

• Cup

• Barrel

• Ladle

Which could be the cause affecting oil price?

• OPEC

• Geopolitical risk

• Economic growth

• All the answers above

OPEC stands for:

• Operation of Petroleum Exporting Countries

• Organization of Petroleum Exporting Countries

• Organization of Petroleum Expecting Countries

• Overall of Petroleum Exporting Countries

What happens when the price of gold increases ?

• Reduced demand for gold

• Increased demand for gold

• The demand for gold has not changed

• It is impossible to predict

What is the predicted average price of gold in the near future ?

• $2,200/ounce

• $2,000/ounce

• $2,170/ounce

• $2,300/ounce

Our group has mentioned various factors influencing the USD Index. How could a significant and unexpected announcement by a major central bank outside the US, impact the USD Index in the short term (within a few days)?

• The impact would likely be minimal as the USD Index only reflects the value of the USD compared to a basket of currencies.

• The USD Index would likely experience a significant increase regardless of the nature of the announcement.

• The USD Index could experience a sharp increase or decrease depending on whether the announcement is perceived as positive or negative for the global economy.

• The USD Index would likely experience a slow and steady change as the market adjusts to the announcement.

Answer explanation

correct - unexpected announcements can cause volatility based on perception