Floating exchange rates are ____ in the short run?

A. Stable
B. Predictable
C. Volatile
D. Depreciating

In the absence of international capital controls, central banks set ________ to provide the correct incentive for speculators?

A. Money supply targets
B. Income policy
C. Interest rates
D. Inflation targets

The competitive advantage from a devaluation is likely to be offset by _______ and ________?

A. Higher import prices, higher wages increases
B. Lower export prices, lower imports volumes
C. Higher import prices, lower export prices
D. Higher wage increases lower import volumes

In the short run the level of floating exchange rates is determined mainly by ?

A. Interest rates
B. Competitiveness
C. Trade
D. Speculation

Which fixed exchange rates and no private capital flows, to correct a balance of payments deficit, the central bank will _______ and ________ ?

A. Buy foreign exchange, sell domestic currency
B. Sell foreign exchange buy domestic currency
C. Buy foreign exchange buy domestic currency
D. Sell foreign exchange sell domestic currency

When the $/£ exchange rate rises the pound _____ and when the $/£ rates falls the pound ________?

A. Depreciates, appreciates
B. Revalues, devalues
C. Appreciates, depreciates
D. Becomes more expensive becomes cheaper

In a fixed exchange rate regime, the central the exchange rate ?

A. selling, increase
B. buying reduce
C. selling, reduce
D. buying increase

Starting from a position of internal and external balance a reduction in aggregate demand will cause a current account ?

A. Deficit
B. Surplus
C. Revaluation
D. Devaluation

Within the circular flow of income, an increase in domestic income will tend to increase ?

A. Exports
B. Taxes
C. Inventories
D. Imports

When capital mobility is perfect interest rate differentials will tend to be offset by ?

A. Price difference
B. Balance of payments difference
C. Current account differences
D. Expected exchange rate changes