A country with an overvalued currency
a. will have a balance of payments deficit.
b. will suffer losses of foreign reserves.
c. must intervene in the foreign exchange market to buy its own currency.
d. All of the above are correct.
d
You might also like to view...
Under a gold standard,
A. with a balance of payments deficit, interest rates would fall and attract foreign capital. B. a deficit in the balance of payments increased a nation’s money supply automatically. C. all currencies were defined in terms of gold. D. when a nation had a deficit in its balance of payments, more gold was flowing in than was flowing out. E. All of the above are correct.
Consider the labor market depicted in the above figure. The competitive equilibrium would be for workers to be paid an hourly wage equal to
A) $10. B) $15. C) $20. D) None of the above answers is correct.
In an ultimatum game
A) non-profit-maximizing behavior often occurs. B) players move simultaneously. C) players act in an economically rational way. D) one player receives nothing.
A risk-free rate can be measured by
A) the rate of inflation. B) the rate on corporate bonds. C) the Federal Reserve's discount rate. D) a rate of a Treasury security.