Explain how a country with a current account surplus is a ripe candidate for currency revaluation
What will be an ideal response?
If a country like Germany had a current account surplus, it would sell its currency in the foreign exchange market in order to keep it from appreciating. The German central banks would thus find themselves swamped with official reserves, and Germany would face the problem of having its money supply grow uncontrollably, a trend that would most likely drive up the domestic price levels and upset internal balance. Revaluation of the currency would thus be a viable solution to this problem.
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If the rate of growth of output is 10% and the rate of growth of per capita real GDP is 6%, what is the rate of growth of population?
A. 2 B. 4 C. 6 D. 8
A haircut (in finance) is ________
A) the payment of a block of funds as part of a refinancing arrangement B) the percentage by which the value of collateral exceeds the value of the loan C) the issue of equities rather than debt in acquiring access to money capital D) the immediate end of lending to subprime borrowers