BMC question and Answers Complete solutions (A+ guide)Concordia University

Document Content and Description Below

CURRENCIES 1) Below is a chart illustrating global trade patterns in 2018. Which of the following countries was the world's largest importer at this time? United States 2) In 1994, the Mexican peso... declined against the U.S. dollar during the so-called "Tequila Crisis." What exacerbating factor did Mexico's "Tequila Crisis" have in common with the Argentine crisis of 2002? Both countries had large dollar-denominated debts. 3) How many Australian dollars (AUD) can you buy with 100 euros (EUR) according to the information in the below chart? 159.68 4) Allison lives in the United States and has just retired. It is the end of October 2018. She has long had dreams of cruising the fjords on the west coast of Norway, visiting Buckingham Palace in the United Kingdom, seeing the cherry blossoms in Japan, and going to the top of the Eiffel Tower in France. She last considered all four options on New Year's Day 2008. She would like to select her trip based on which country's currency has subsequently weakened the most against the U.S. dollar. Where should she go on vacation? United Kingdom 5) Review the currency pair charts for the Barbadian dollar against the Jamaican dollar, the Czech koruna against the Polish zloty, the Ingerian naira against the Ghanaian cedi, and the Hong Kong dollar against the Macanese pataca. Which pair is pegged? The Hong Kong dollar against the Macanese pataca 6) Which of the following is an example of a successful peg? Hong Kong dollar against the U.S. dollar in 1997. 7) Use the chart below to answer the question. How many Danish crowns (DDK) will buy 100 Japanese yen (JPY)? 5.868 8) According to the Big Mac index screen, which of the following four countries' currency is the most undervalued? Mexico 9) What generally happens when a central bank unexpectedly decreases interest rates? The currency weakens 10) Which driver weakened the Swiss franc? A surprise change in inflation expectations 11) What does the Big Mac index show? How currencies may be overvalued or undervalued 12) Which of the following are short-term drivers of currency valuation? Surprise changes in interest rates, inflation, and trade. 13) The white line on the first chart below shows the dollar index, which is an index that measures the general international value of the dollar. Which factor graphed in the second image is most supportive of the strength of the dollar over the period shown? Federal Funds Target Rate, the main U.S. interest rate. 14) Which of these headlines is most likely to move a currency pair? U.S. Stocks Sink on Fed's Surprise Increase of Interest Rate. 15) What is the most common measure central banks seek to target directly? Inflation 16) What was the primary goal of Abenomics? To halt the vicious cycle of deflation. 17) Here is the vicious deflationary cycle. What step connects the upper right blue arrow to the lower left gray arrow? Company revenues decline. [Show More]

Last updated: 1 year ago

Preview 1 out of 7 pages