If a country wants to keep the domestic currency overvalued against a foreign currency:
A) it will buy both the foreign and domestic currency.
B) it will sell both the foreign and domestic currency.
C) it will buy the domestic currency and sell the foreign currency.
D) it will buy the foreign currency and sell the domestic currency.
C
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The theoretical effects of taxation on portfolio composition are ambiguous.
A. True B. False C. Uncertain
A bank can lower its leverage risk by
A) issuing more stock. B) buying more securities and making fewer loans. C) more closely matching the average maturity of its assets and liabilities. D) taking in fewer deposits and relying more in miscellaneous liabilities to raise funds.
We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when
A) workers can easily be replaced by capital goods. B) the product produced in the industry has very few substitutes. C) the product is produced in a perfectly competitive industry. D) labor represents a relatively small portion of total costs.
In 1991, the French mineral water Perrier was temporarily taken off the market in the United States because of suspected impurities. Other things equal, this action brought about:
a. an increase in the demand for Perrier. b. a decrease in the price of Perrier in terms of French francs. c. a depreciation of the French franc relative to the U.S. dollar. d. an appreciation of the French franc relative to the U.S. dollar. e. an increased supply of dollars in the foreign exchange market.