In the Foreign Currency Market,the Supply of a Foreign Currency

question 153

Multiple Choice

In the foreign currency market,the supply of a foreign currency is assumed to be ________ because the central bank determines the supply of money.

• A) horizontal
• B) vertical
• C) upward sloping
• D) downward sloping
• E) uncontrollable

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Definitions:

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Certificate of Deposit

A savings certificate issued by a bank to a person depositing money for a specified length of time, typically earning a fixed interest rate.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less, offering a secure, low-risk investment option.

Petty Cash Fund

A little bit of readily available money intended for covering small costs.