If a developing country has sufficient reserves, the buying and selling of foreign currency by the central bank is:
A. likely to have a much smaller impact on the exchange rate than in developed countries.
B. completely ineffective on the exchange rate.
C. likely to have a much greater impact on the exchange rate than in developed countries.
D. likely to have roughly the same impact on the exchange rate as in developed countries.
Answer: C
You might also like to view...
Induced taxes are defined as taxes
A) that vary with real GDP. B) enacted by Congress that explicitly state the amount to be paid. C) we are forced to pay for services from the government. D) that rise in recessions and fall in expansions. E) that are avoided with the use of legal tax shelters.
Consider the two economies of Lithasia and Barylia. Economic agents in Lithasia have coordination and incentive problems, while in Barylia social surplus is maximized
Which economic system does each of these economies most likely have? Explain your answer.
Explain briefly the following concepts:
(a) Increasing returns to scale (b) Decreasing returns to scale (c) Constant returns to scale
An increase in product price implies that
A) the firm's marginal factor cost will increase. B) the wage rate the firm pays will increase. C) the firm's demand for labor increases. D) the firm's demand for labor decreases.