Euro - Dollar Parity

What role do global organizations like the IMF and WTO play in stabilizing exchange rates?

• • They provide subsidies to large corporations

• • They focus solely on inflation control

• • They help countries work together to prevent sudden exchange rate fluctuations

• • They control the exchange rates directly

What is a potential consequence for Vietnam if the Euro becomes weaker compared to the U.S. Dollar?

• • Increased export competitiveness in Europe

• Reduced foreign debt servicing costs

• Increased revenues from European markets

• Higher foreign debt repayments for Vietnam

How did global trade growth change in 2023, according to the World Trade Organization (WTO)?

• It significantly declined to 0.5%

• It increased to 3.5%

• It slowed to 1.7% due to exchange rate uncertainties

• It remained stable at 2.7%

Which international organization can help stabilize exchange rates between countries?

• International Monetary Fund (IMF)
• World Bank
• European Union
• United Nations

How did the Bank of England respond to inflation reaching a 41-year high in 2022?

• Froze all interest rate adjustments

• The Bank of England implemented stricter lending regulations.
• Ignored inflation and focused on economic growth

• The Bank of England raised interest rates 325 basis points in 2022

What does ECB stand for?

Does euro-dollar parity make Vietnamese exports less competitive in the U.S. market?

• yes

• no

What is one potential benefit of euro-dollar parity for Vietnam’s economy?

• Increased export competitiveness for Vietnamese goods.
• Increased reliance on imports for essential goods.
• Decreased foreign investment in Vietnam.
• Higher inflation rates in the country.

How does euro-dollar parity affect foreign direct investment (FDI) flows into Europe and the U.S.?

• It increases FDI inflows due to reduced currency volatility.

• Euro-dollar parity decreases FDI into both Europe and the U.S.
• Euro-dollar parity increases FDI into the U.S. while decreasing FDI into Europe.
• It increases FDI inflows due to reduced currency volatility.

What do you think: Why might U.S. investors find Vietnam more attractive during euro-dollar parity?