loading8.30 A higher nominal interest rate in one country indicates the fact that the country’s
currency was expected to ________.
a. b. c. d.
appreciate evaluate devalue depreciate
Real interest rate parity, p. 340
8.31 In the short run, equality of interest rates across country boundaries is ________.
a. b. c. d.
unlikely
a good description of reality
a good description of purchasing power parity a result of stable foreign currency markets
Assessment, p. 341
8.32 ________ techniques are typically based on formal economic models of exchange rate
determination.
a. b. c. d.
Technical analysis Fundamental analysis Exchange rate forecasting Mean absolute error
Fundamental exchange rate forecasting, p.342
8.33 What currency forecasting technique links exchange rates to macroeconomic variables
such as money supply and inflation?
a. b. c. d.
Technical analysis Fundamental analysis Exchange rate forecasting Mean absolute error
Fundamental exchange rate forecasting, p.342
8.34 A summary statistical measure frequently used when forecasting exchange rates is
known as the ________.
a. b. c. d.
standard deviation mean
mean absolute error mode
Two measures of accuracy, p.344
8.35 This statistic is calculated by taking the square root of the average squared forecast
errors.
a. b. c. d.
the mean absolute error the standard deviation the mode
the root mean squared error
Two measures of accuracy, p.344
8.36 If a country has a capital account ________, it is ________ net foreign assets.
a. b. c. d.
deficit, acquiring deficit, losing surplus, acquiring
surplus, in equilibrium as far as its
The capital account and real exchange rates, p.354
8.37 If a country has a capital account ________, it is ________ net foreign assets.
a. b. c. d.
surplus, acquiring deficit, losing surplus, losing
surplus, in equilibrium as far as its
The capital account and real exchange rates, p.354