Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future revaluation. In such a situation, we would generally expect which of the following to occur?
A) an increase in the domestic interest rate
B) an announcement by the central bank that a large revaluation will occur in the near future
C) an increase in demand for the country's currency
D) all of the above
E) none of the above
A
You might also like to view...
If a country's real GDP grows at 10% per year, its real GDP will double about every
A) 5 years. B) 7 years. C) 10 years. D) 14 years.
Suppose you have spent your entire budget and the marginal utilities per dollar spent on all the goods you buy are equal. Which of the following is true?
a. You are not being rational. b. There is a way to increase your utility by reallocating your purchases. c. You will reduce your utility if you allocate your income in any other way. d. You are minimizing your total utility. e. You have chosen a consumption bundle that lies below your budget line.