If the Forward Exchange Rate of the Dollar in Terms

question 18

Multiple Choice

If the forward exchange rate of the dollar in terms of pounds is less than the spot exchange rate,

• A)inflation must be lower in the United States than in Britain.
• B)inflation must be higher in the United States than in Britain.
• C)market participants must be expecting the dollar to appreciate against the pound.
• D)market participants must be expecting the dollar to depreciate against the pound.

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Definitions:

Judicial Decision

A ruling or determination made by a judge or court regarding a legal matter or case.

Checks and Balances

A system in which different parts of an organization or government have powers that affect and control the other parts, preventing any one part from becoming too powerful.

Equal Protection Clause

The provision in the Fourteenth Amendment to the U.S. Constitution that guarantees that no state will “deny to any person within its jurisdiction the equal protection of the laws.” This clause mandates that state governments treat similarly situated individuals in a similar manner.

Suspect Trait

A characteristic or feature in a person that may cause them to be viewed with suspicion or as a potential culprit in a criminal investigation.