A dual exchange rate is no different from a devaluation in that they both try to improve a country's BOP
Indicate whether the statement is true or false
TRUE
You might also like to view...
Currency traders expect the dollar to appreciate. What impact will this have on equilibrium in the foreign exchange market?
A) The dollar will appreciate, and the equilibrium quantity of dollars will increase. B) The dollar will appreciate, and the equilibrium quantity of dollars will decrease. C) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease. D) The dollar will appreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined.
A bank has excess reserves of $4,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess reserves will be
A) -$5,000. B) -$1,000. C) $1,000. D) $5,000.
M1 money includes all but which one of the following?
a. Checkable deposits. b. Savings accounts. c. Paper money. d. Coins.
Suppose that when the price of good X falls from $10 to $8, the quantity demanded of good Y rises from 20 units to 25 units. Using the midpoint method, the cross-price elasticity of demand is
a. -1.0, and X and Y are complements. b. -1.0, and X and Y are substitutes. c. 1.0, and X and Y are complements. d. 1.0, and X and Y are substitutes.