An undervalued exchange rate is an exchange rate:
A. that equals the number of units of a foreign currency over the number of units of domestic currency.
B. that has an officially fixed value greater than its fundamental value.
C. that has an officially fixed value less than its fundamental value.
D. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal.
Answer: C
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Fractional reserve banking is the system that
A) allows banks not to insure their deposits. B) allows banks not to join the Federal Reserve System. C) limits banks' activities from crossing state lines. D) allows banks to keep smaller reserves than their deposits.
The three central questions for efficient organizational design include all EXCEPT a. does the decision maker have the relevant information?
b. is the decision maker in a supervisory role? c. who is making the decision? d. does the decision maker have an incentive to make a good decision?