BUSI 604 Test 2 (Set-2), Questions And Answers, Liberty University

BUSI 604 Test 2

 Question 1
2 out of 2 points
OTC participants trade on a physical trading floor.

Selected Answer: False

 Question 2
2 out of 2 points
(___________) is considered a sign of economic recovery and
stabilization but makes the currency of a country more expensive
compared to other currencies, having a direct inverse effect on exports
and imports.

Selected Answer: Revaluation



 Question 3
0 out of 2 points
Purchasing Power Parity has an impact on exchange rates and
indicates the current level of inflation of one currency against another.

Selected Answer: False


 Question 4
2 out of 2 points

, Eurocurrency and Eurobanks do not necessarily mean the currencies
or the banks are European.

Selected Answer: True
 Question 5
2 out of 2 points
Speculation generally means buying a commodity when its price is
low and then reselling it after prices rise in order to make a profit.

Selected Answer: False
 Question 6
0 out of 2 points
A large percentage of all FX market transactions are spot transactions.

Selected Answer: False
 Question 7
2 out of 2 points
The end result of the global competition is higher (_______) and lower
(_________) for consumers.

Selected Answer: quality products; prices
 Question 8
2 out of 2 points
A simpler way to calculate purchasing power parity between two
countries is to compare the price of a (________) good that is in fact
identical across countries.

Selected Answer: Standard
 Question 9
2 out of 2 points

, The (___________) monitors the various companies and organizations
that are quoted on the security exchange and make sure they meet the
requirements for being listed.

Selected Answer: Securities Exchange Commission
 Question 10
2 out of 2 points
Global financial markets are important to borrowers for two reasons
such as (1) to expand the supply of money, and (2) reduce the cost of
money.

Selected Answer: True
 Question 11
0 out of 2 points
The role of the World Bank is to supervise the exchange rate practices
of member countries and to encourage the free convertibility of any
national money into the monies of other countries.

Selected Answer: True
 Question 12
2 out of 2 points
The difference between a (_______) rate and a (________) rate is
termed a forward discount.

Selected Answer: spot and forward
 Question 13
2 out of 2 points
A currency board is a government’s bank and is capable of bailing out
a failing bank.

, Selected Answer: False
 Question 14
2 out of 2 points
The majority of transactions on the FX include operations with
(_________), where one party sells or buys dollars using other world
currencies.

Selected Answer: the U.S. Dollar
 Question 15
2 out of 2 points
(__________) essentially decreases a consumer’s purchasing power by
making goods and services more expensive.

Selected Answer: Inflation
 Question 16
2 out of 2 points
If a currency price is expected to rise in the future, a buyer pays a
higher price, which is considered a forward discount.

Selected Answer: False
 Question 17
0 out of 2 points
In the United States, the (____________) is responsible for regulating
the growth of the economy.

Selected Answer: Global Financial Market
 Question 18
2 out of 2 points