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81) Fundamental forecasters assume that if current exchange rates reflect all facts in the market, then under similar circumstances, future rates will follow the same patterns.

82) Fundamental forecasting uses trends in economic variables to predict future rates.

83) The three variables predicted by forecasting are the timing, magnitude, and length of exchange rate movements.

84) When forecasting exchange rates, forecasters must predict the magnitude, timing, and direction of change in exchange rates.

85) Technical forecasting relies on trends in economic variables to predict future exchange rates.

86) A current account deficit suggests that a country is importing more than it is exporting and building up foreign debt.

87) An MNE would most likely benefit from converting local currency into its home-country currency when exchange rates are most favorable so it can maximize its return.

88) Producers are affected by exchange rate changes because goods manufactured in a country with a weak currency will be relatively cheap in world markets.

89) The IMF uses the quota system to determine how much a country may borrow from the Fund.

90) El Salvador's hard peg exchange rate arrangement involves the use of both the U.S. dollar and its own separate legal tender.

 

 

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