Currency speculation involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
TRUE or FALSE
What is TRUE
100
Under the Jamaica Agreement, floating exchange rates were declared acceptable, and gold was abandoned as a reserve asset.
TRUE or FALSE
What is TRUE
100
Adverse consequences of unpredictable changes in exchange rates is known as
What is Foreign Exchange Risk
100
Most of the IMF’s programs in 2004 were in
What is developing nations
100
The difference between the value of a product to an average consumer and the cost of production per unit is
What is value creation
200
The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as a
What is currency swap
200
The ______ maintains order in the international monetary system
What is IMF
200
The largest trading center in the foreign exchange market is __________.
What is London
200
According to ______, in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency
What is law of one price
200
An efficient market
What is has no impediments to the free flow of goods and services
300
Buying a currency low and selling it high is known as
What is arbitrage
300
In 1976, the ________ formalized the floating exchange rate system that followed the collapse of Bretton Woods.
What is Jamaica Agreement
300
The exchange rate is
What is the rate at which one currency is converted into another
300
The gold standard has it origin in
What is merchantilism / the use of gold coins as a medium of exchange.
300
In the context of value chain analysis, the primary activities of a firm include:
What is R&D, production, marketing & sales, and service
400
The world's four major currencies
What is are all free to float against each other
400
Two factors why Bentton Woods failed
What is Vietnam, Nixon, inflation, dollar could only be devalued if other currencies agreed, speculation that the dollar would decrease
400
In a _____ exchange rate system, the value of a set of currencies is fixed against each other at some mutually agreed on exchange rate.
What is fixed
400
A strategy that focuses on increasing the attractiveness of a product is referred to as a(n)
What is differentiation strategy
400
The ________ shows all of the different positions a firm can adopt with regard to adding value to the product and low cost assuming the firm’s internal operations are configured efficiently to support a particular position
What is efficency frontier
500
Two basic conditions determine a firm's profits
What is the amount of value customers place on the firm's good and services and the firm's costs of production
500
When is you Application Paper Due
What is April 20th
500
The institutional arrangements that govern exchange rates are known as the
What is international monetary system
500
A country is said to be in balance-of-trade equilibrium when
What is the income that its residents earn from exports is equal to the money that its residents pay for imports / exports = import income
500
Discuss the three primary criticisms of the IMF
What is "one-size fits all policy", moral hazard, too powerful with lack of accountability