#1
What is the most liquid currency in the world?
US Dollar
ExplanationWidely accepted and traded globally.
#2
What is the currency of Brazil?
Real
ExplanationOfficial currency of Brazil.
#3
What is the currency of China?
Yuan
ExplanationOfficial currency of China.
#4
Which country is associated with the currency Baht?
Thailand
ExplanationOfficial currency of Thailand.
#5
What is the name of the currency in Turkey?
Lira
ExplanationOfficial currency of Turkey.
#6
What is the largest denomination of the Euro?
500
ExplanationThe highest value Euro banknote.
#7
Which currency is associated with the ticker symbol GBP?
British Pound
ExplanationOfficial currency of the United Kingdom.
#8
What is the key determinant of the exchange rate in the long run according to purchasing power parity?
Inflation Rate
ExplanationInflation influences relative currency values over time.
#9
What does the Big Mac Index measure?
Purchasing power parity
ExplanationRelative currency value based on identical goods' prices.
#10
What is the role of central banks in managing exchange rates?
Central banks indirectly influence exchange rates through monetary policies
ExplanationCentral banks influence currency value through policy interventions.
#11
What does the term 'pegged exchange rate' refer to?
An exchange rate that is fixed to the value of another currency or a basket of currencies
ExplanationCurrency value is fixed relative to another currency or basket of currencies.
#12
Which country is associated with the currency Dirham?
United Arab Emirates
ExplanationOfficial currency of United Arab Emirates.
#13
What is the term for a situation where a country's currency is tied to the currency of another country?
Currency peg
ExplanationCurrency value fixed to another currency.
#14
Which of the following countries is not a part of the European Union?
Switzerland
ExplanationSwitzerland is not in the European Union.
#15
What is an example of a fixed exchange rate system?
Currency Board System
ExplanationCurrency value is pegged to another currency.
#16
How do currency depreciation and devaluation differ?
Currency depreciation occurs naturally, while devaluation is a deliberate action by governments
ExplanationDepreciation is market-driven, devaluation is deliberate government action.
#17
What is the main purpose of using forward contracts in currency trading?
To mitigate the risk of exchange rate fluctuations
ExplanationHedging against future exchange rate changes.
#18
Which theory suggests that exchange rates adjust to ensure that identical goods cost the same in different countries?
Purchasing Power Parity (PPP)
ExplanationCurrency values adjust to equalize purchasing power.
#19
What is the function of a currency board?
To issue and maintain a country's currency
ExplanationRegulates currency issuance and maintenance.
#20
What is the term for a situation where a central bank actively trades in the foreign exchange market to influence the exchange rate?
Managed float
ExplanationCentral bank intervention to influence currency value.
#21
What is an example of a freely floating exchange rate system?
Managed Float System
ExplanationCurrency value determined solely by market forces.