International Trade and Currency Exchange

What is the foreign exchange market?

• A market where commodities like gold and oil are traded

• A market where currencies of different countries are bought and sold

• A market where goods and services are traded between nations

• A market where stocks and bonds are traded

What is the foreign exchange rate?

• The price of goods and services in different countries

• The price of stocks and bonds in different currencies

• The price of gold in different currencies

• The price of a currency in the currencies of other nations

What is a fixed rate of exchange?

• A system where the exchange rate for currency changes based on supply and demand

• A system where the currency of one nation is fixed in relation to other currencies

• A system where the value of a currency is determined by the price of gold

• A system where the value of a currency is determined by the balance of trade

What is a trade surplus?

• When a nation has an unfavorable balance of trade

• When a nation imports more than it exports

• When a nation exports more than it imports

• When a nation has a favorable balance of trade

What is the balance of payments?

• A measure of the value of a nation's foreign investments

• A measure of the value of a nation's imports and exports

• A measure of the international value of a currency

• A record of all the transactions that occurred between individuals, businesses, and government units of one nation and those of the rest of the world

What is the flexible rate of exchange?

• A system where the value of a currency is determined by the balance of trade

• A system where the currency of one nation is fixed in relation to other currencies

• A system where the exchange rate for currency changes based on supply and demand

• A system where the value of a currency is determined by the price of gold

What is the trade-weighted value of the dollar?

• A measure of the international value of the dollar

• A measure of the value of the dollar compared to other currencies

• A measure of the value of the dollar in relation to gold

• A measure of the value of the dollar in relation to the balance of trade

What happens to imports when the value of the dollar increases?

• Imports stay the same

• Imports are not affected

• Imports become less expensive

• Imports become more expensive

What is the balance of trade in the United States?

• A surplus in both goods and services and foreign investments

• A deficit in both goods and services and foreign investments

• A surplus in foreign investments but a deficit in goods and services

• A surplus in goods and services but a deficit in foreign investments

What is the current trend in the U.S. balance of trade?

• Stable

• Improving

• Fluctuating

• Declining