Test 5 of 9

Short answers question:

1-Briefly describe the three main institutions of the foreign exchange market.

2- What is the foreign exchange market? Explain why investors use this market.

3- Briefly describe how exchange rates influence business activities.

4- Briefly describe any two of the three main components of the international capital market.

5- Explain how exchange rates adjust to inflation.

6- Explain how a pegged exchange-rate system works. Why would a country choose to follow this system?

7- Describe the purposes of the international capital market. What factors account for its rapid growth?

8- Describe the most important features of the international monetary system created by the Bretton Woods Agreement.

Module Discussion

Discuss how exchange rates influence international business activities. (one paragraph or two)



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