Hi,

Could you please help me answer the 4 questions below? I need the correct answer, and if possible, a brief explanation. Thanks very much :)

Question 3 During the Bretton Woods era (and currently for countries applying fixed exchange rate systems within a band mechanism) when a currency approached the limits of the band a government would intervene in the markets. If the exchange rate approached the lower limit of the band, the government would its domestic currency using foreign exchange and gold, or if the exchang rate approached the upper limit, they would domestic currency. Select one: A. buy; buy B. sell; sell C. sell; buy D. buy; sell Question 4 Which of the following is not an example of comparative advantage? Select one: A. Wool from Australia is exported worldwide. B. Microsoft exports software to India. C. The export of Champagne from the champagne region of France. D. Computer hardware is designed in the United States but manufactured and assembled in China.t=7039549&cmid=228848# com IE Question 5 We would generally expect covered interest rate parity to exist in markets, but when we have covere interest arbitrage: Select one: covered A. the arbitrageur trades only in the spot currency exchange markets. B. the arbitrageur trades only in the forward currency exchange markets. C. all of the above are true. D. the market must be out of equilibrium. Question 6 Differential rates of inflation between two countries are thought by a number of prominent academics and market players to be: Select one: A. offset over time through the effect of relative Purchasing Power Parity. B. offset immediately through the effects of absolute Purchasing Power Parity. C. offset over time through the effects of absolute Purchasing Power Parity. D. offset immediately through the effect of relative Purchasing Power Parity