In Practice

question 49

Multiple Choice

In practice

• A) changes in national price levels often tell us relatively little about exchange rate movements.
• B) changes in national price levels raise the exchange rate.
• C) changes in national price levels lower the exchange rate.
• D) changes in national price levels often tell us about exchange rate movements.
• E) changes in national price levels match identical changes in the exchange rate.

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Definitions:

Cheque

A bill of exchange that is drawn on a banking institution, and payable on demand.

Drawer

In the context of banking and finance, a drawer is the person who writes or issues a check, directing a bank to pay the stated amount from the drawer's account.

Payee

The individual or entity to whom money is payable or is meant to be paid, typically named in financial documents like checks or promissory notes.

Certification

Of a cheque, an understanding by a bank to pay the amount of a cheque on presentation.