A. enhances
B. undermines
C. encourages
D. facilitates
Macroeconomic Issues and Analysis
Under floating exchange rates, expectations of higher interest rates are likely to cause an …. of the exchange rate?
A. depreciation
B. appreciation
C. fall
D. devaluation
If one country, with floating exchange rates, has higher inflation than its competitors we would expect its exchange rate to ?
A. appreciate
B. depreciate
C. revalue
D. be in short supply
In the ERM, each country fixed participant Collectively the group …….. against the rest of the world?
A. a nominal exchange rate, floated
B. a real exchange rate, pegged
C. a purchasing power parity, pegged
D. a real exchange rate, floated
All of the following are benefits of the single market except ?
A. it allows countries to exploit their comparative advantage, more fully
B. firm could more readily exploit
C. economies of scal
D. it intensified competition
E. it is easier to book holidays in member countries