An overvalued exchange rate is an exchange rate:
A. that equals the number of units of a foreign currency over the number of units of domestic currency.
B. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal.
C. that has an officially fixed value greater than its fundamental value.
D. that has an officially fixed value less than its fundamental value.
Answer: C
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Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in
A) intra-industry trade. B) price competition. C) inter-industry trade. D) Heckscher-Ohlinean trade. E) immiserizing trade.
The long-run effect of rent control on an area includes
A) rampant building of new low-income housing. B) many new luxury apartments new luxury apartments will be built. C) new investors into the real estate market in the area. D) less investment into the real estate market in the area.
The following are comments by consumers about the wheat market. Which of them reflects a perfectly competitive market?
a. “It is unusual for a company to leave the wheat market.” b. “Getting into the wheat market can be difficult.” c. “The quality of wheat often declines as the price rises.” d. “It doesn‘t matter where you buy wheat, the quality is the same.”
What is economics and what does it try to explain?
What will be an ideal response?