A country that is experiencing a balance of payments surplus can correct this situation by:
A. revaluing its currency.
B. devaluing.
C. keeping its peg as long as possible.
D. abandoning its currency in favor of the US dollar or the euro.
Answer: A
You might also like to view...
If increasing returns to scale are present, the long-run average cost increases as more output is produced
Indicate whether the statement is true or false
When the government imposes a tax, sellers raise their price by the full amount of the tax
a. True b. False Indicate whether the statement is true or false
Cold turkey refers to the announcement and execution of tough measures to reduce high inflation
Indicate whether the statement is true or false
The graph below shows a change in the demand for Swiss francs from D1 to D2. What would happen when D1 shifted to D2 under a flexible exchange rate system compared to a fixed exchange rate system?
