1) If there is a large supply of savings relative to the demand for short-term funds the interest rate for that country will be relatively low.
A) True B) False
2. Assume that British corporations begin to purchase more supplies from the US as a result of several labor strikes British suppliers. This action reflects
A) An increased demand for British pound
B) A decrease in the demand for Swiss Francs.
C) An increase in the demand of US dollars
D) A decrease in the supply of British pounds for sale
3. which of the following is an example of direct intervention by the Fed in foreign exchange markets?
A) Lowering interest rates,
B) Increasing the discount rate,
C) Exchanging dollars for foreign currency.
D) Imposing barriers on interactional trade
4. The real interest rate adjusts the nominal interest rate for (Fisher Effect");
A) Exchange rate movements,
B) Income growth
C) Inflation.
D) None of these.