Forex Quiz - Forex Trading Quiz Questions & Answers

Here is a collection of forex trading quiz questions with answers for you to test your forex trading skills. It ia advised to take the forex quiz below to test your forex knowledge before you start to trade. If you have already started, take it and make sure you know the basics of forex trading.

Forex Trading Quiz Questions and Answers

Participate in this forex quiz and test your forex knowledge. This forex quiz test your skills in forex trading.

1. Question: If inflation is low and a Central Bank is concerned about recession, what would the expected monetary policy response be?

Answer: The expected monetary policy response would be to lower interest rates.

2. Question: If inflation and growth are both high what would the expected monetary policy response be?

Answer: The expected monetary policy response would be to raise interest rates.

3. Question: If a central bank raises interest rates, what affect if any is this expected to have on the currency of that country, all else being equal?

Answer: If a central bank raises interest rates, the expected affect on the currency of that country would be to strengthen, that is, the currency of that country would become more expensive with respect to its trading partners.

4. Question: If a central bank lowers interest rates, what affect if any is this expected to have on the currency of that country, all else being equal?

Answer: If a central bank lowers interest rates, the expected affect on the currency of that country would be to weaken, that is, the currency of that country would become less expensive with respect to its trading partners.

5. Question: If a country’s imports grow and all other trade and capital flows remain equal, what affect would this have on the current account and what would be the expected affect on the currency if any?

Answer: In the case that imports grow, other trade and capital flows remaining constant, the current account deficit would increase, and as a result the currency would decrease in value with respect to trading partners.

6. Question: If a country’s exports grow and all other trade and capital flows remain equal, what affect would this have on the current account and what would be the expected affect on the currency if any?

Answer: In the case that exports grow, other trade and capital flows remaining constant, the current account would become more positive, and as a result the currency would increase in value.

7. Question: If a country is a major exporter of gold and the price of gold moves up by 50% over the course of a year, what would be the expected affect if any on that country’s currency all else being equal?

Answer: The effect on that country’s currency would be an increase in value.

8. Question: Japan is a major importer of oil and Canada is a major exporter of oil. If the price of oil goes up by 50% over the course of a year, then what affect if any should this have on the CAD/JPY currency pair all else being equal?

Answer: The CAD/JPY currency pair would increase. That is, the number of JPY per CAD would increase, meaning that the JPY would lose value with respect to the CAD.

9. Question: Traders who follow US Dollar fundamentals pay particular attention to any numbers which reflect the overall health of the consumer. Why?

Answer: Traders pay particular attention to numbers which reflect the overall health of the consumer because this is a good leading indicator to the overall health of the USD, the US economy, and the attractiveness of the USD with respect to other currencies.

10. Question: The US Economy in the past was referred to as an Industrial Economy, now it is referred to more as which economy?

Answer: A blendid economy, an economy with elements of capitalism, and government-controlled elements such as education, highways, military.

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