In some developing countries and in some former Communist countries, people exchange their domestic currencies for foreign currencies such as the dollar in black markets. Why would this practice go on?
What will be an ideal response?
The country must have some restrictions on currency exchange. Some countries have made it illegal to exchange the domestic currency for dollars beyond some minimum amount while others set official exchange rates. If the official exchange rate differs from the "market" exchange rate, it is likely black markets will form.
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Which of the following is most likely to be a feature of a contingent contract?
A) A CFO is paid $250,000 if he does a good job. B) A VP of Sales is given options as part of her salary. C) Both A and B. D) None of the above.
Which of the following statements about the Third World is true?
a. Except for Latin America, most Third World citizens live in urban areas. b. The culture, politics, and geography of the Third World countries are very similar. c. Third World economies are largely dependent on manufacturing industries. d. The Third World is made up of non-communist developing countries. e. About 80 percent of the population of the Third World countries live in China and India.
Under the gold standard:
A) the United States set the price of gold at $35 per ounce, and other countries then established their exchange rates against the U.S. dollar (e.g., £1 = $5). B) Great Britain and the United States set the price of gold at $35 per ounce and £7 per ounce, and then other countries established their exchange rates against either the British pound or the U.S. dollar. C) all countries pegged the values of their currencies to gold. D) only gold was used to settle international transactions.