A speculative attack on a country with a fixed exchange rate occurs when:
A. financial market participants believe the government has a large excess of international reserves.
B. financial market participants believe the government will have to devalue its currency.
C. financial market participants believe the currency is undervalued.
D. the country converts its gold reserves into foreign exchange.
Answer: B
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The short-run Phillips curve tradeoff becomes less favorable if either
A) the expected inflation rate or the natural unemployment rate increases. B) potential GDP or the natural unemployment rate increases. C) potential GDP or the natural unemployment rate decreases. D) the level of real GDP decreases or the natural unemployment rate decreases. E) the expected inflation rate increases or the natural unemployment rate decreases.
If Norwegian workers are more productive than Albanian workers, then trade between Norway and Albania
A) will take place so long as each country has a comparative advantage in a good or service that buyers in the other country want. B) cannot take place until Albanian workers become more productive. C) can take place only if Albania has an absolute advantage in producing a good or service Norwegian buyers want. D) cannot take place because Norwegian goods and services will be less expensive than Albanian goods and services.
Which of the following statements is correct?
A) The depth and the length of all business cycles are identical. B) The depth and the length of all business cycles are different. C) Business cycles are caused by seasonal unemployment changes. D) Business cycles are caused by unanticipated inflation.
The true causal effect might not be the same in the population studied and the population of interest because
A) of differences in characteristics of the population B) of geographical differences C) the study is out of date D) all of the above