What would happen to a low-income nation if its liability currency appreciated against its own currency?
A) Its external wealth would rise because low-income nations have more assets than liabilities.
B) Its external wealth would not be affected because currency values are fixed.
C) Its external wealth would fall because low-income nations tend to have more external liabilities denominated in other currencies.
D) Its external wealth would rise because of the ability of its monetary authority to print more money.
Ans: C) Its external wealth would fall because low-income nations tend to have more external liabilities denominated in other currencies.
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The current deficit is
A) the deficit minus government investment. B) the deficit plus net interest payments. C) the deficit minus current expenditures. D) the deficit minus depreciation.
"Dividing the economic pie more equally may reduce the size of the economic pie." This argument is characterized as:
a. a conflict between full employment and economic growth. b. a form of discrimination. c. a conflict between equity and efficiency. d. untrue.