AGB 302 WEEK 5 QUIZ 100% SOLUTION

AGB 302 WEEK 5 QUIZ 100% SOLUTION When a tourist goes to a bank in a foreign country to convert money into a local currency exchange rate used is the Forward rate spot rate currency swap rate carry trade - ANSWER Spot rate Country X and country Y reach an agreement to boost bilateral trade they agreed to remove all barriers to the trade of goods and services. They however are free to determine their own trade policies with regard to nonmembers which level of economic integration is this an example of? A free trade area a common market an economic union a customs union - ANSWER A free trade area The short term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates is known as Currency speculation currency risk mitigation currency hedging currency arbitrage - ANSWER Currency speculation A _____ entails even closer economic integration and cooperation than a common market. Economic union free trade area Full political union customs union - ANSWER Economic union An exchange rate of € = $1. 30 indicates that One euro buys $1.30 One could get 1.30 Euros for $1 euro buys $0.77 $1 is worth 1.30 euros - ANSWER One euro buys 1.30 dollars Which of the following is a reason why the European Union is considered an imperfect economic union? factors of production are not allowed to move freely between member countries almost all markets are heavily regulated