Expectations are destabilizing if they are based on the belief that exchange rates eventually return to the values consistent with basic economic conditions.

Answer the following statement true (T) or false (F)


False

Economics

You might also like to view...

Which of the following is NOT a problem caused by black markets?

A) Legally banned goods are traded in black markets. B) Black markets pose a threat to legitimate businesses. C) Black markets lead to an inefficient use of society's resources. D) Black markets lead to a fall in the demand for goods.

Economics

Consider a small open economy that is in equilibrium with a current account surplus

(a) Draw a diagram showing this situation. (b) Now suppose that future income increases. Show what happens in your diagram. What happens to the world real interest rate and the equilibrium quantities of saving, investment, and the current account balance? (c) Repeat parts (a) and (b) for the case of a large open economy, showing a situation in which the home country initially has a current account surplus. Draw a diagram and describe how the rise in future income in the home country affects all four variables (the world real interest rate and the equilibrium quantities of saving, investment, and the current account balance) in both countries.

Economics

There is a shortage in a market for a product when:

a. The increase in demand is greater than the increase in supply b. Quantity demanded is less than quantity supplied c. Quantity demanded is greater than quantity supplied d. The increase in supply is greater than the increase in demand

Economics

The difference between actual and natural unemployment rates is called ________ unemployment

A) turnover B) mismatch C) cyclical D) measured

Economics