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WorksheetsRECAP First Block
Total questions: 60
Worksheet time: 39mins
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
Expectation is when foreign exchange market react to any news that may have future effect.
True
False
A bond's interest rate
Coupon Rate
Maturity
Par Value
Yield
The length of a bond
Coupon Rate
Maturity
Par Value
Yield
The principle amount (face value)
Coupon Rate
Maturity
Par Value
Yield
The rate of return (calculated yearly)
Coupon Rate
Maturity
Par Value
Yield
The best rating a bond can receive
D
AAA
AA
B
Bonds issued by local governments for improvement projects
Municipal
Savings
Treasury
Junk
A stockholder's share of the company's profit
Dividend
Par Value
Share
Yield
Two type of stocks
Domestic stock
Common Stocks
Preferred Stocks
International stocks
It is the current price of a stock which it can sold
Market Value
Par Value
It is the face value of a bond or stock as stated on the company certificate
Market Value
Par Value
People who own stocks are guaranteed a return on the money they have invested in
stocks.
TRUE
FALSE
The only way stockholders make money is through dividend payments while they own
the stock
TRUE
FALSE
Are costs rising or lowering with inflation?
Rising
Lowering
What cause of inflation comes from an increase in commodity prices such as oil and wheat, or an increase in wages?
Cost-push inflation
Demand-pull inflation
Price-push inflation
Supply-pull inflation
None of the answers
What is an exchange rate?
The rate at which goods are exchanged between two countries
The price of one nation's currency in terms of another's
How many US dollars you can exchange for RMB at Travelex
The price of goods in terms of a foreign currency
How is an exchange rate determined in the money market?
The forces of supply and demand
Government/the Federal Reserve Bank
Whatever sellers of goods are willing to take
Investors decide the value of the currency they wish to invest
Why do changing exchange rates help one country and hurt the other?
One side loses purchasing power and the other gains it
Takes money away from one side and gives it to the other
Causes war between the two countries
One country's government introduces tariffs to protect local industries
What type of exchange rate system do most countries operate under?
Flexible
Floating
Fictitious
Fixed
How does inflation rate affect currency value/exchange rate?
Higher inflation leads to depreciating currency & vice versa
Increasing inflation leads to more favourable exchange rates
Higher inflation leads to currency appreciation
Lower inflation leads to more favourable exchange rate
If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?
Mexico has less purchasing power in Chinese currency
Mexico benefits from increased purchasing power
Mexico would have more Chinese investors
They would be invaded by China
What is likely to cause a rise in a country’s foreign exchange rate?
a fall in its exports of goods and services
a fall in its imports of goods and services
a fall in its inflow of income
a rise in its outflow of transfers
When the US$ exchange rate falls it will usually
help to reduce a US trade deficit.
increase the foreign price of US exports.
reduce the price of US imports.
reduce US inflation
The policy of eliminating barriers to international trade; free trade allows goods and services to move more freely across borders.
Free Trade
Protectionism
Trade Embargo
The policy of erecting trade barriers to shield domestic markets from foreign competition.
Free Trade
Protectionism
Trade Barriers
A limit on the quantity of a good that can be imported during a specific period of time; a type of trade barrier.
Protective Tariff
Import Quota
Trade Embargo
VER
The process by which people and economies around the world are becoming increasingly interconnected; the integration of national economies into the global economy.
Trade Barrier
Globalization
Macroeconomics
Microeconomics
Goods and services produced in other countries and sold domestically.
import
export
Goods and services produced domestically and sold in other countries.
import
export
The condition that exists when someone can produce a good or service using fewer resources than someone else.
Absolute Advantage
Comparative Advantage
The condition that exists when someone can produce a good or service at a lower opportunity cost than someone else.
Absolute Advantage
Comparative Advantage
Sending goods to another country to sell.
import
export
Bringing goods in from another country to sell.
import
export
A large company such as McDonalds that has operations in more than one country.
Domestic Corporation
Multinational Corporation
Foreign Corporation
State Corporation
What are some negatives of globalization?
Workers are exploited in sweatshops
Pollution and deforestation
Low wages for factory workers in Asia and Africa
All of the answers are correct
Who typically ends up paying tariffs?
Importers and/or consumers
The International Monetary Fund
Congress
Exporters
