True or false

The clean float is an exchange rate system that is relatively free from central bank and other government interventions. Arbitrage is the purchase of assets or commodities on one market for immediate resale 2. on another in order to profit form a price discrepancy 3. A strengthening of the U.S. dollar with respect to the British pound would likely reduce the U.S. exports to Britain and increase U.S. imports from Britain. The overwhelming majority of foreign exchange transactions involve banks buying and selling foreign exchange Major advantages of futures contracts include the freedom to liquidate the contract at 5. any time before its maturity. Multiple Choice(4) 1. is another name for the complete replacement of the local currency with the U.S. dollar. a. Seignorage b. Dollarization c. Depreciation d. Appreciation e. None of the above For Each Scenario, state whether the S will Appreciate or Depreciate relative to the Yen (A,D,S) A-S Appreciate, D S Depreciate, S Same exchange rate 2. 1) Real Interest rates is higher in the US than Japarn 2) US Productivity falls behind Japan 3) 4) US places restrictions on foreigners to keep them from buying US real estate Prices in Japan and the US are rising at the same rate Fs