Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other currencies is referred to as a depreciation of the U.S. dollar. an appreciation of the U.S. dollar. a monetizing of the U.S. dollar. a devaluation of the U.S. dollar.

If the U.S.A. imports more than it exports, then: O a. The supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus. Ob. One can infer that the U.S. dollar would be under pressure to depreciate against other currencies. O. Both a. and b. are correct. O d. None of the above.

In the context of foreign exchange, how are non-deliverable currency situations typically handled?   The difference between the contracted forward rate and the prevailing spot rate is settled in a widely traded currency, such as the USD.   Non-deliverable currencies are avoided entirely in forward contracts to prevent any complications.   Both parties agree to extend the contract until the currency becomes deliverable.   The currencies are exchanged physically at a predetermined future date.

Under a managed-float exchange rates regime, if the rate of inflation in Australia is less than the rate of inflation of its trading partners, the AUD will likely: a. depreciate against foreign currencies. b. be officially devalued by the Reserve Bank. c. appreciate against foreign currencies. d. be officially revalued by the Reserve Bank