The benefits of a currency area include: a)Elimination of transaction costs due to different exchange rates...
The benefits of a currency area include:
a)Elimination of transaction costs due to different exchange rates
b) Intensified trade
c) All answers are correct
d) Elimination of exchange rate risk
Homework Answers
Option c) all answers are
correct, is the correct answer..Add Answer to:
The benefits of a currency area include:
a)Elimination of transaction costs due to different exchange
rates...
What are the pros and cons of the euro currency area? The euro is a global...
What are the pros and cons of the euro currency area? The euro is a global currency adopted by countries around the world. The US is considering adopting the Euro because of the trade benefits. The Euro allows individual members of the European Union to control their own exchange rates. The Euro improves economic integration of European members, but some members are having a difficult time with the discpline associated with a loss of control over their currency. All of...
The daily exchange rates for the five-year period 2003 to 2008 between currency A and currency...
The daily exchange rates for the five-year period 2003 to 2008 between currency A and currency B are well modeled by a normal distribution with mean 1.303 in currency A (to currency B) and standard deviation 0.036 in currency A. Given this model, and using the 68-95-99.7 rule to approximate the probabilities rather than using technology to find the values more precisely, complete parts (a) through (d). a) What would the cutoff rate be that would separate the lowest 0.15%...
Several factors affect the exchange rate of a currency with another currency. Which of the following...
Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates? Check all that apply. When a government limits imports and restricts foreign exchange transactions, its currency's value tends to increase relative to other currencies. An increase in inflation tends to increase the currency's value with respect to other currencies with lower inflation. If a government intends to prevent its currency's value...
help with these 3 problems 78) 78) Exchange rates that are allowed to fluctuate in the...
help with these 3 problems
78) 78) Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand is known as A) standard drawing rights. B) the foreign exchange market. C) the exchange rate. D) flexible exchange rates. 79) 79) If the foreign exchange rate is 70 cents for one yen, then A) a house that costs 100,000 yen will cost $700,000.00. B) a car that costs 40,000 yen will cost $7,143.00....
1) The currency futures markets have a long history and are ______________ due to their information...
1) The currency futures markets have a long history and are ______________ due to their information driven nature. Select one: a. heavily regulated by the U.S. federal government b. extremely volatile c. extremely complicated d. not volatile 2) Which one of the following is NOT a disadvantage when using currency futures? Select one: a. low initial payment to purchase the contract b. limited number of currencies available in futures c. fixed contract sizes by currency d. limited number of expiration...
Question 27 Which statement is TRUE regarding the gold standard? a. Very few countries participated in...
Question 27 Which statement is TRUE regarding the gold standard? a. Very few countries participated in the gold standard prior to the Great Depression b. The gold standard allowed for flexible exchange rates similar to what we have today c. Countries with large trade surpluses would accumulate more gold stocks. d. Gold was fairly evenly distributed across many countries during the 1930s. 3.33 points Question 28 Which of these is a potential cost of adopting another country's currency as its...
Challenge Problem. Following are currency exchange “crossrates” between pairs of major currencies. Currency crossrates include both...
Challenge Problem. Following are currency exchange “crossrates”
between pairs of major currencies. Currency crossrates include both
direct and indirect methods for expressing relative exchange rates.
Currency crossrates include both direct and indirect methods for
expressing relative exchange rates.
U.S. U.K. Swiss Japanese European
Dollar Pound Franc Yen Euro
EMU 1.1406 ? 0.6783 0.0087 ---
Japan 130.66 185.98 77.705 --- 114.60
Switzerland 1.6817 2.3936 --- 0.0129 ?
United
Kingdom ? --- 0.4178 ? 0.6162
United
States --- 1.4231 ? 0.0077 0.8767
a. Fill in the missing exchange rates in
the crossrates table.
b. If the inflation rate is expected to be
3 percent in the European Monetary Union
(EMU) and 4 percent in...
8) Transaction costs are: A) The costs of a trade or financial transaction. B) The costs...
8) Transaction costs are: A) The costs of a trade or financial transaction. B) The costs that savers incur to determine the creditworthiness of borrowers. C)The costs that savers incur to monitor how borrowers use the funds acquired D) All of the above are correct
8) The price of one currency in terms of another is called A) the terms of...
8) The price of one currency in terms of another is called A) the terms of trade. C) purchasing power parity B) a currency band D) the exchange rate. 19) -- exchange rates are either held constant or allowed to fluctuate( ) only within very narrow boundaries, A) managed float exchange rate system B) Freely exchange rate system ) pegged exchange rate system D) fixed exchange rate system : ------- Is the replacement (Jap) of a foreign currency with U.S...
63. An arbitrageur in foreign exchange is a person who a- buys foreign currency hoping to profit by selling it at a higher exchange rate at some other date b earns illegal profit by manipulating forei...
63. An arbitrageur in foreign exchange is a person who a- buys foreign currency hoping to profit by selling it at a higher exchange rate at some other date b earns illegal profit by manipulating foreign exchange c- causes differences in exchange rates in different geographic markets d- simultaneously buys large amounts of a currency in one market and sells it in another market e- mediates disputes when there is no agreement on exchange rates in international currency market
Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates? Check all that apply. When a government limits imports and restricts foreign exchange transactions, its currency's value tends to increase relative to other currencies. An increase in inflation tends to increase the currency's value with respect to other currencies with lower inflation. If a government intends to prevent its currency's value...
help with these 3 problems
78) 78) Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand is known as A) standard drawing rights. B) the foreign exchange market. C) the exchange rate. D) flexible exchange rates. 79) 79) If the foreign exchange rate is 70 cents for one yen, then A) a house that costs 100,000 yen will cost $700,000.00. B) a car that costs 40,000 yen will cost $7,143.00....
Challenge Problem. Following are currency exchange “crossrates”
between pairs of major currencies. Currency crossrates include both
direct and indirect methods for expressing relative exchange rates.
Currency crossrates include both direct and indirect methods for
expressing relative exchange rates.
U.S. U.K. Swiss Japanese European
Dollar Pound Franc Yen Euro
EMU 1.1406 ? 0.6783 0.0087 ---
Japan 130.66 185.98 77.705 --- 114.60
Switzerland 1.6817 2.3936 --- 0.0129 ?
United
Kingdom ? --- 0.4178 ? 0.6162
United
States --- 1.4231 ? 0.0077 0.8767
a. Fill in the missing exchange rates in
the crossrates table.
b. If the inflation rate is expected to be
3 percent in the European Monetary Union
(EMU) and 4 percent in...
8) Transaction costs are: A) The costs of a trade or financial transaction. B) The costs that savers incur to determine the creditworthiness of borrowers. C)The costs that savers incur to monitor how borrowers use the funds acquired D) All of the above are correct
8) The price of one currency in terms of another is called A) the terms of trade. C) purchasing power parity B) a currency band D) the exchange rate. 19) -- exchange rates are either held constant or allowed to fluctuate( ) only within very narrow boundaries, A) managed float exchange rate system B) Freely exchange rate system ) pegged exchange rate system D) fixed exchange rate system : ------- Is the replacement (Jap) of a foreign currency with U.S...
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