What is the name of the expression that refers to the costs that a firm incurs in changing its prices? A) fixed costs B) variable costs C) cost-base pricing D) menu costs ANSWER Answer: D
Date: September 19th, 2020
What is more appropriate to use when attempting to find information about the purchasing power of a currency? A) the spot exchange rate B) the forward rate C) the price levels D) the price indexes ANSWER Answer: C
Date: September 19th, 2020
When the external purchasing power or a currency is greater than the internal purchasing power, the currency is said to be ________. A) overvalued B) undervalued C) at parity D) in arbitrage ANSWER Answer: A
Date: September 19th, 2020
If people expect that their future purchasing power will decline, what will happen to the exchange rate today? What will be an ideal response? ANSWER Answer: Typically, when people think that the purchasing power of a money is going to decline in the future, due to higher expected inflation, they try to sell […]
Date: September 19th, 2020
________ float results from the lapse between the time when a firm deducts a payment from its checking account ledger and the time when funds are actually withdrawn from its account. A) Mail B) Processing C) Collection D) Disbursement ANSWER D
Date: September 19th, 2020
What is the name of the ratio of a price level at one point in time to the price level in a designated base year? A) bid-ask spread B) reserve requirement C) percent spread D) price index ANSWER Answer: D
Date: September 19th, 2020
________ float is the delay between the receipt of a check and the actual deposit of it into a firm’s account. A) Disbursement B) Deposit C) Processing D) Clearing ANSWER C
Date: September 19th, 2020
One important reason to study the purchasing power parity theory is because A) investors should borrow in a foreign currency, when there is a forward discount. B) when inflation rates differ across international borders, PPP provides a baseline forecast of future exchange rates. C) forecasting exchange rates is difficult and PPP makes it easier. D) […]
Date: September 19th, 2020
Understanding the theory of purchasing power parity is important because deviations from PPP significantly affect the A) operations of the central bank. B) hedging activities of multinational firms. C) profitability of multinational firms. D) arbitrage opportunities in the banking markets. ANSWER Answer: C
Date: September 19th, 2020
Within the United States, what is the name for the power of a dollar when it is used to purchase an amount of goods and services? A) internal purchasing power B) external purchasing power C) absolute purchasing power parity D) relative purchasing power parity ANSWER Answer: A
Date: September 19th, 2020
