Industrial countries are not usually involved in currency bailouts since they are not likely to be affected by the devaluation of another country's currency.
Answer the following statement true (T) or false (F)
False
An industrial country is likely to be affected by the devaluation of another country's currency through trade; a country that is bailed out may avoid disastrous disruptions to trade, thereby helping the industrial country.
You might also like to view...
Using the UIP equation, equilibrium in the short run occurs when
a) arbitrage is possible b) the spot rate is such that foreign and domestic investment returns are equalized c) the spot rate and forward rate are equalized d) foreign interest rates and domestic interest rates are equalized
Which of the following can prevent markets from reaching efficiency? I. price regulations that cap the price that may be charged II. increasing marginal cost III. monopoly
A) I only B) I and II C) II and III D) I and III