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Exchange Rate System Quiz

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Exchange Rate System Quiz

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Quick true/false on how exchange rates work.

Created by

Montex
Montex
Canada

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Exchange Rate System Quiz
 

Exchange Rate System QuizOnline version

Quick true/false on how exchange rates work.

by Montex
1

A fixed exchange rate regime involves the government setting the rate through the central bank.

2

A devaluation is a downward adjustment of the exchange rate making the domestic currency cheaper on the foreign exchange market.

3

Speculators play no role in influencing exchange rates.

4

The exchange rate is the price of one currency in terms of another.

5

A clean floating regime means the government actively intervenes to keep the rate steady.

6

In a floating exchange rate system, the forces of demand and supply determine the value of the currency with no government interference.

7

A depreciation means the currency becomes more valuable on the foreign market.

8

The equilibrium exchange rate is found by the supply curve alone without considering demand.

9

The supply curve for a currency slopes downward from left to right.

10

A revaluation is an upward adjustment of the exchange rate making the domestic currency more expensive on the foreign exchange market.

 
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