Quiz 16

? equalizes the prices of internationally traded goods across countries.

Purchasing power parity

What do the economies of Greece, Ireland and Germany all share?

a common currency

If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to ?

a floating exchange rate

The ? is an example of a large-scale common currency.

euro

People or firms use one currency to purchase another currency at the ?

foreign exchange market

If the Canadian dollar is strengthening, then ?

it has appreciated in the terms of other currencies

When a government uses a ? exchange rate policy, it usually allows the exchange rate to be set by the market.

soft peg

Foreign direct investment is the term used to describe purchases of firms in another country that involve ?

taking a management responsibility

Exchange rates are an effective way to analyze the price of one currency in terms of another currency with ?

the tools of demand and supply

A depreciating U.S. dollar is ? because it is worth ? in terms of other currencies.

weakening; less