Consider Vietnam and the Philippines as trade partners and the Vietnamese Dong and Philippine Peso as the currencies in the foreign exchange market for items 41 and 42. Which of the following will result to the depreciation of the Philippine Peso? O a. Increase in the supply of the Philippine Peso O b. Decline in the demand for both currencies O c. Increase in supply of the Vietnamese Dong O d. Increase in demand for the Philippine Peso Which of the following will result to an appreciation of the Vietnamese Dong? O a. Recession in the Philippines O b. Higher interest rates in the Philippines than in Vietnam O c. Lower price levels in Vietnam than in the Philippines
Consider Vietnam and the Philippines as trade partners and the Vietnamese Dong and Philippine Peso as the currencies in the foreign exchange market for items 41 and 42. Which of the following will result to the depreciation of the Philippine Peso? O a. Increase in the supply of the Philippine Peso O b. Decline in the demand for both currencies O c. Increase in supply of the Vietnamese Dong O d. Increase in demand for the Philippine Peso Which of the following will result to an appreciation of the Vietnamese Dong? O a. Recession in the Philippines O b. Higher interest rates in the Philippines than in Vietnam O c. Lower price levels in Vietnam than in the Philippines
Chapter20: International Finance
Section: Chapter Questions
Problem 2.3P
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Transcribed Image Text:1
2.
3.
Consider Vietnam and the Philippines as trade partners and the Vietnamese Dong and Philippine Peso as the currencies in the
foreign exchange market for items 41 and 42.
Which of the following will result to the depreciation of the Philippine Peso?
O a. Increase in the supply of the Philippine Peso
O b. Decline in the demand for both currencies
O c.
Increase in supply of the Vietnamese Dong
O d. Increase in demand for the Philippine Peso
Which of the following will result to an appreciation of the Vietnamese Dong?
O a. Recession in the Philippines
O b. Higher interest rates in the Philippines than in Vietnam
O c. Lower price levels in Vietnam than in the Philippines
O d. Civil unrest is on the rise in Vietnam
The level of exchange rate can only be determined by market forces or the supply and demand of currencies.
O a. True
O b. False
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