ECS3701 Assignment 1 Semester 1 2024

ECS3701 Assignment 1 (QUIZ QUESTIONS & ANSWERS) Semester 1 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions. For assistance call or W.h.a.t.s.a.p.p us on ...(.+.2.5.4.7.7.9.5.4.0.1.3.2)........... Question 1 Complete CBM mark 2.00 Weight 2.00 Hedging refers to: a. foreign exchange arbitrage b. the acceptance of a foreign exchange risk c. the avoidance of a foreign exchange risk d. foreign exchange speculation Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 2 Complete CBM mark 2.00 Weight 2.00 The relative PPP theory gives better results: a. the greater is the level of commodity aggregation b. in the long run than in the short run c. intests including developed and developing countries d. when structural changes take place Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 3 Complete CBM mark 2.00 Weight 2.00 The marginal propensity to import measures: a. the ratio of income to imports b. the change in imports over the change in income c. the change in income over the change in imports d. the ratio of imports to income Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 4 Complete CBM mark 0.00 Weight 2.00 Which is false regarding the double-entry bookkeeping a. All ofthe above b. It usually leads to a statistical discrepancy c. Each transaction is entered twice with equal values d. It should lead to the balance of net borrowing and net lending in all the accounts Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 5 Complete CBM mark 2.00 Weight 2.00 A depreciation of a nation's currency is: a. inflationary for the nation b. any of the above c. deflationary for the nation Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 6 Complete CBM mark 2.00 Weight 2.00 The export of a good or service is recorded in a nation’s balance of payments as a. Net lending in the current account and net lending in the financial account b. Net borrowing in the current account and net borrowing in the financial account c. Net lending in the current account and net borrowing in the financial account d. Net borrowing in the current account and net lending in the financial account Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 7 Complete CBM mark 0.00 Weight 2.00 Capital account transactions include a. Bank deposits abroad b. The purchase of a foreign stock c. None of the above d. Derivatives Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 8 Complete CBM mark 2.00 Weight 2.00 In order to isolate the income adjustment mechanism, we assume that: a. the nation operates at less than full employment b. all prices, wages, and interest rates are constant c. All of the above d. the nation operates under a fixed exchange rate system Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 9 Complete CBM mark 0.00 Weight 2.00 The foreign exchange market is stable when: a. All of the above b. the supply curve of foreign exchange is negatively inclined and less elastic than the demand curve c. the sum of the absolute values of the elasticity of the nation's demand of imports and the foreign demand for the nation's exports is greater than one d. The demand curve of foreign exchange is negatively inclined, and the supply curve of foreign exchange is positively inclined Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 10 Complete CBM mark 0.00 Weight 2.00 Which of the following is false about currency -pass-through: a. Is higher in the long run than in the short run b. Is higher for industrial goods than for other goods c. None of the above d. May be less than complete Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 11 Complete CBM mark 0.00 Weight 2.00 A depreciation of the nation's currency causes its terms of trade to: a. Deteriorate b. Remain unchanged c. Improve d. Any of the above Certainty@ : — C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 12 Complete CBM mark 0.00 Weight 2.00 According to the monetary approach to the balance of payments, a nation has no control over its money supply a. shortrun b. Inthe long run and under fixed exchange rate c. None of the above d. Inthe long run and under a flexible exchange rate system Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 13 Complete CBM mark 0.00 Weight 2.00 If SR=$1/€1.01 and the three-month FR=$1.02/€1: 4. the euro is at a forward discount of 1% per year b. the euro is at a three-month forward discount of 1% c. the dollar is at a three-month forward premium of 4% per year d. the euro is at a three-month forward premium of 1% Certainty@ : — C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 14 Complete CBM mark 0.00 Weight 2.00 To simultaneously correct a balance of payments deficit and unemployment, a nation requires a: a. only devaluation b. expansionary fiscal and monetary policies c. None of the above d. acombination of expenditurechanging and expenditureswitching policies Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is incorrect. You did not select a certainty. Assuming: C=1 (Unsure: 67%). Question 15 Complete CBM mark 2.00 Weight 2.00 A major difference between the spot market and the forward market is that the spot market deals with a. hedging of international currency risks b. currencies traded for future delivery c. the merchandise trade account d. the immediate delivery of currencies Certainty@ : —C=1 (Unsure: 67%) C=2 (Mid: 67%) C=3 (Quite sure: 80%) Your answer is correct. You did not select a certainty. Assuming: C=1 (Unsure: 67%).