Q26. An economy is in long-run equilibrium and the values of its imports and exports are equal. If the growth rate of the money supply is unexpectedly decreased, what are the most likely effects on real GDP and the country’s current account balance? Real GDP Current account A) Increase Suplus B) Decrease Deficit C) Decrease Surplus
Q27. George Gao, CFA, is a currency portfolio manager who believes that the asset market approach can be applied to make short run forecasts of exchange rates based on the long-term effects of the changes in a country’s money supply. Recently, Japan unexpectedly reduced its money supply by 5%, increasing interest rates from 1.5% to 2.0%. Japan’s current spot rate is 108.74 Japanese yen per United States dollar (JY/USD). George believes that it will take two years for the effects of the decrease in the money supply to reduce the inflation rate in Japan. The current interest rate in the U.S. is 1.5%. Based on George’s calculations, the decrease in the money supply will translate to an immediate spot exchange rate of: A) 115.59 JY/USD. B) 103.30 JY/USD. C) 102.29 JY/USD.
Q28. Valerie Connors, CFA, is an economist with PJ Morton Bank. She wants to use the asset markets approach to make short run forecasts on the value of several currencies. She has decided to use the asset markets approach for the euro. One of the shortcomings of the asset markets approach is that: A) it cannot help determine forward rates. B) it cannot help determine expected future spot exchange rates. C) its use is limited to the determination of inflation rates.
Q29. Nathan Hawk, CFA, is an economist with National City Bank. He wants to use the asset markets approach in determining the current spot exchange rates for the Mexican peso. Nathan needs to know what components affect the peso. Which of the following groups contain the most important components of the asset markets approach? A) Inflation and interest rates. B) Forward exchange and risk-free rates. C) Money supply and inflation rates.
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发表于 2009-1-13 14:28
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