Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports.
b. The government should devalue the peso.
c. The government should print more pesos to increase its supply.
d. The government should allow the peso to appreciate.
e. The government should allow the peso to depreciate.
d
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If you liquidate $3,000 of your mutual fund and transfer the funds to your checking account, then initially, M1 will ________ and M2 will ________
A) increase; decrease B) increase; not change C) not change; not change D) not change; decrease
An increase in the tax rate (t)
A) will rotate the budget line upward. B) will increase the slope of the budget line. C) will shift the budget line downward. D) A and B.
The central bank of a country alters the quantity of money in a way that affects the supply curve in the market for loanable funds. In this way, it is able to change the interest rates
a. True b. False Indicate whether the statement is true or false
If a government redesigned its unemployment insurance programs so that the unemployed had greater incentives to quickly find appropriate jobs, then which of the following curves would shift right?
a. the long-run Phillips curve and the long-run aggregate supply curve b. the long-run Phillips curve but not the long-run aggregate supply curve c. the long-run aggregate supply curve but not the long-run Phillips curve d. neither the long-run Phillips curve nor the long-run aggregate supply curve