Devaluation of a domestic currency
a. is also called revaluation
b. refers to an increase in a floating exchange rate
c. refers to a decrease in a floating exchange rate
d. refers to an increase in a fixed exchange rate
e. refers to a decrease in a fixed exchange rate
D
You might also like to view...
According to the Solow model, given the levels of total efficiency units of labor and technology:
A) efficiency units of labor do not play any role in the determination of steady-state equilibrium level of GDP. B) there is a maximum fixed level of GDP that an economy can achieve by increasing savings. C) increases in the savings rate is the sole reason for sustained economic growth. D) increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth.
In a short run competitive equilibrium
A) the market demand curve is horizontal. B) the market demand curve is downward sloping. C) the market demand curve is perfectly inelastic. D) All of the above are possible.
Assuming the free flow of capital across borders, explain why a country that has a fixed exchange rate cannot have an independent monetary policy reaction curve.
What will be an ideal response?
Foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market are called:
A. fixed-exchange-rate deposits. B. balance-of-payment currency. C. purchasing-power-parity funds. D. international reserves.