When a country's ability to maintain its fixed exchange rate is doubted by investors:
A. it may fall under a speculative attack.
B. the value of its currency tends to appreciate too quickly.
C. the exchange rate is likely to spiral upward, out of control.
D. All of these statements are true.
Answer: A
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Monetarists believe that the private sector of our economy is inherently ______.
Fill in the blank(s) with the appropriate word(s).
Factory A can reduce emissions at a cost of $400 per ton. Factory B can reduce emissions at a cost of $100 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B. b. Neither firm can profit from selling its pollution rights to the other. c. Factory B can profit from selling its pollution rights to Factory A. d. Both firms have an incentive to sell pollution rights.
Scarcity is illustrated graphically by a production possibilities frontier
a. True b. False Indicate whether the statement is true or false
The chief cause of short-run changes in exchange rates is
A. the world’s political situation. B. “hot money” chasing high interest rates. C. changes in consumer tastes. D. central bank interventions.