A sign that Country A is under pressure to appreciate its currency is its:
a. Current account is in surplus.
b. Overall balance is in surplus.
c. Capital account is in surplus.
d. Overall balance is in deficit.
e. Reserves account is in surplus (i.e., positive).
.B
You might also like to view...
Suppose that the U.S. interest rate is 5 percent and the Japanese interest rate is 1 percent. The effect of this difference in the foreign exchange market is that
A) financial capital stops moving. B) a Japanese investor is guaranteed to make an additional 4 percent in yen terms by investing in the United States. C) investors expect the yen to appreciate against the dollar. D) investors expect the yen to depreciate against the dollar.
Subsidies can destroy wealth because
a. subsidies move assets from lower- to higher- valued uses b. subsidies move assets from higher- to lower- valued uses c. subsidies help producers only d. subsidies help consumers only