• Question 1 1 out of 1 points
What is the name given to the weighted average of the nominal prices of the goods and
services consumed in the economy?
Selected Answer:
price level
Correct Answer:
price level
Response Feedback:
Module 4 Slide 9
• Question 2 1 out of 1 points
Which one of the following is NOT a drawback when economists use survey data to examine
the unbiasedness hypothesis?
Selected Answer:
Correct Answer:
Response Feedback:
Book Page 243
• Question 3 1 out of 1 points
Which one of the following would be an answer to why the forward exchange rate is an
unbiased predictor of the future spot rate?
Selected Answer:
the forward rate equals the conditional expectation of the future spot rate
Correct Answer:
the forward rate equals the conditional expectation of the future spot rate
Response Feedback:
Module 3 Slide 98,99
• Question 4 1 out of 1 points
When the price of one commodity is the same wherever in the world the good is being sold
when denominated in a particular currency, it is said the Law of ________ prevails.
Selected Answer:
one price
Correct Answer:
one price
Response Feedback:
Module 4 Slide 21
• Question 5 1 out of 1 points
When is a currency said to be overvalued?
Selected
Answer:
when its external purchasing power is greater than its internal purchasing
power
Correct Answer:
when its external purchasing power is greater than its internal purchasing
power
Response Feedback:
Module 4 Slide 26
• Question 6 1 out of 1 points
Which of the following theories suggests that the percentage difference between the forward
rate and the spot rate depends on the interest rate differential between two countries?
Selected Answer:
interest rate parity (CIRP).
Correct Answer:
interest rate parity (CIRP).
Response Feedback:
Module 3 Slide 13
• Question 7 1 out of 1 points
The version of purchasing power parity that states the exchange rates will adjust to equalize
the internal and external purchasing power of a currency is known as the ________.
Selected Answer:
absolute purchasing power parity
Correct Answer:
absolute purchasing power parity
Response Feedback:
Module 4 Slide 41
• Question 8 1 out of 1 points
Which of the following theories suggests that the percentage change in spot exchange rate of a currency should
be equal to the inflation differential between two countries?
Selected Answer:
purchasing power parity (PPP).
Correct Answer:
purchasing power parity (PPP).
Response Feedback:
Module 4
• Question 9 1 out of 1 points
Within the United States, what is the name for the power of a dollar when it is used to
purchase an amount of goods and services?
Selected Answer:
internal purchasing power
Correct Answer:
internal purchasing power
Response Feedback:
Module 4 Slide 18
• Question 10 1 out of 1 points
When people describe what they think an exchange rate value should be, they often use a
benchmark model, known as ________.
Selected Answer:
purchasing power parity
Correct Answer:
purchasing power parity
Response Feedback:
Module 4
• Question 11 1 out of 1 points
When the forward rate is equal to the expected future spot rate, the forward rate is said to be
________ the future spot rate.
Selected Answer:
Correct Answer:
Response Feedback:
Module 3 Slide 98,99
Within Germany, what is the name for the power of a U.S. dollar when it is used to purchase
an amount of goods and services?
Selected Answer:
external purchasing power
Correct Answer:
external purchasing power
Response Feedback:
Module 4 Slide 19
According to the international Fisher effect (IFE):