2011 BEC

Wiley CPA Exam Questions- BEC


The following is from the Online Wiley CPA Test Bank.

    1. A short-term speculative rise in the worldwide value of domestic currency could be moderated by a central bank decision to

A: Sell domestic currency in the foreign exchange market.
B: Buy domestic currency in the foreign exchange market.
C: Sell foreign currency in the foreign exchange market.
D: Increase domestic interest rates.

 

  • If the US dollar declines in value relative to the currencies of many of its trading partners, the likely result is that

 

A: Foreign currencies will depreciate against the dollar.
B: The US trade deficit will worsen.
C: US exports will tend to increase.
D: US imports will tend to increase.

 

  • Which of the following changes would create pressure for the Japanese yen to appreciate relative to the US dollar?

 

A: An increase in incomes in Japan.
B: A change in US tastes in favor of Japanese goods.
C: A decrease in US incomes.
D: A change in Japanese tastes in favor of US goods.

 

  • The real risk-free rate

 

A: Includes a default premium.
B: Assumes that inflation is expected.
C: Includes a liquidity premium.
D: Is the basic component of interest.

 

  • Exchange rates are determined by

 

A: Each industrial country's government.
B: The International Monetary Fund.
C: Supply and demand in the foreign exchange market.
D: Exporters and importers of manufactured goods.

THE AUTHOR

Jeff Elliott

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