Foreign exchange risk is
A. an exchange rate arrangement in which a country pegs the value of its currency to the exchange value.
B. the possibility that changes in the value of a nation's currency will result in variations in the market value of assets.
C. a financial strategy that reduces the change of suffering losses arising from foreign exchange risk.
D. active management of a floating exchange rate on the part of a country's government.
Answer: B
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If government saving is negative, then
A) G > T. B) Y + TR < C - T. C) T - TR < G. D) T > TR.
U.S. net export spending falls when
A) the inflation rate is lower in the United States relative to other countries. B) the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries. C) the value of the U.S. dollar decreases relative to other currencies. D) the price level in the United States falls relative to the price level in other countries.
Money is valuable because it
What will be an ideal response?
If output falls, which of the following could be an explanation?
a. a rise in the interest rate b. a fall in foreign income c. a decline in government spending d. a rise in the interest rate, a fall in foreign income, or a decline in government spending