If people expect that their future purchasing power will decline, what will happen to the exchange rate today?
What will be an ideal response?
Answer: Typically, when people think that the purchasing power of a money is going to decline in the future, due to higher expected inflation, they try to sell that currency today to get into a currency that will have more stable purchasing power. This reduced demand for the currency causes that currency to weaken or depreciate immediately.
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To oppose the Glass-Steagall Act, banks argued that they
A. would be forced to extend deposit insurance coverage to firms that were not banks. B. would have a conflict of interest between their needs to underwrite stocks and to serve their customers. C. could gain greater monopoly power by lending only to big businesses. D. could take advantage of economies of scope if they were able to underwrite securities and sell them directly to their customers.
Disclosure frauds occur through misrepresentations about the company or through what other intentional act?
a. omissions in the footnotes to the financial statements b. falsely increasing sales c. creating off-balance sheet accounts d. conducting related-party transactions
Which of the following is a disadvantage of person-administered surveys?
A) They are slower than other methods. B) They are more expensive. C) They are prone to errors. D) High cost. E) all of the above
Which of the following risks do service providers face when they do not accurately predict and manage demand?
A. leveled demand B. insufficient capacity in the form of busy resources C. financial risk D. good customer service