Explain what is meant by a devaluation of a currency. Under what circumstances would a country devalue its currency?
What will be an ideal response?
In a fixed exchange rate system, a country faces a balance of payments deficit when the supply of its currency exceeds the demand at the fixed exchange rate. The country can lower the value at which the currency is pegged to increase its net exports; this is called a devaluation.
Economics
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Suppose the economy experiences a recessionary gap. Expansionary monetary policy will
A) increase real GDP and increase the price level. B) increase real GDP and decrease the price level. C) decrease real GDP and increase the price level. D) decrease real GDP and decrease the price level.
Economics
The Reagan administration's policies were aimed at managing aggregate demand
a. True b. False Indicate whether the statement is true or false
Economics