Question

In: Economics

International companies use the foreign exchange market for the following reasons EXCEPT _________. b.they must pay...

International companies use the foreign exchange market for the following reasons EXCEPT _________.

b.they must pay a foreign company for its products or services in its country’s currency

c.they have spare cash that they wish to invest for short terms in money markets

d. they use the money to invest in US savings bonds

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A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates

Swaps are transacted for the following reasons EXCEPT ___________.

a. alternative to buying oil and gas.

b. between international businesses and their banks

c. between banks

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A floating exchange rate system exists when a country allows the foreign exchange market to determine the relative value of a currency. The following currencies with the exception of ___________ float freely against each other.

the U.S. dollar, the EU euro, the Japanese yen, and the British pound all float freely against each other

b. Japanese yen

c. Russian ruble

d. European Euro

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The gold standard refers to a system in which countries peg currencies to gold and guarantee their convertibility.

a. all the gold in Fort Knox

b. The gold standard dates back to ancient times when gold coins were a medium of exchange, unit of account, and store of value

d. dates back to Richard Nixon and his attempt to stabilize the economy.

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In 1944, representatives from 44 countries met at Bretton Woods, New Hampshire, to design a new international monetary system that would facilitate postwar economic growth. Under the new agreement

a fixed exchange rate system was established

all currencies were fixed to gold, but only the U.S. dollar was directly convertible to gold

devaluations could not to be used for competitive purposes

a country could not devalue its currency by more than 10% without IMF approval

Select one:

b. all currencies were fixed to the gold standard with only the USA dollar convertible to gold.

c. devaluations were allowed for competitive purposes

d. a country could de-valuate their currency at their own discretion

ANSWER ALL PLEASE AND IF THE ANSWER IS IN ONE OF THOSE OPTIONS>

THANK YOU I WILL GIVE 2 THUMBS UP :)

Solutions

Expert Solution

1:-International companies use the foreign exchange market for the following reasons EXCEPT :-. ANSWER (D)

2.A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates

Swaps are transacted for the following reasons EXCEPT ___________. ANSWER:- (A)

3.A floating exchange rate system exists when a country allows the foreign exchange market to determine the relative value of a currency. The following currencies with the exception of ___________ float freely against each other.the U.S. dollar, the EU euro, the Japanese yen, and the British pound all float freely against each other. ANSWER:-(D)

4.The gold standard refers to a system in which countries peg currencies to gold and guarantee their convertibility. ANSWER :-(B)

5.In 1944, representatives from 44 countries met at Bretton Woods, New Hampshire, to design a new international monetary system that would facilitate postwar economic growth. Under the new agreementa fixed exchange rate system was established.all currencies were fixed to gold, but only the U.S. dollar was directly convertible to gold..devaluations could not to be used for competitive purposes...a country could not devalue its currency by more than 10% without IMF approval

Select one: ANSWER:-(B)


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