A. The external value of the currency would tend to fall
B. The external value of the currency would tend to rise
C. The injections from trade are greater then the withdrawals
D. Aggregate demand is increasing
Related Mcqs:
- Exchange rate of which of the following currencies falls because of persistent balance of payments deficit ?
A. Gold currency
B. Hard currency
C. Silver currency
D. Soft currency - Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?
A. very high rates of inflation occur domestically
B. foreigners discriminate against domestic products
C. technological advance is superior abroad
D. the domestic currency is undervalued relative to other currencies - Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?
A. dual exchange rates
B. managed floating exchange rates
C. adjustable pegged exchange rates
D. crawling pegged exchange rates - Which fixed exchange rates and no private capital flows, to correct a balance of payments deficit, the central bank will _______ and ________ ?
A. buy foreign exchange, sell domestic currency
B. sell foreign exchange buy domestic currency
C. buy foreign exchange buy domestic currency
D. sell foreign exchange sell domestic currency - If Canada runs a balance of payments surplus and exchange rates are floating ?
A. the value of other currencies will rise relative to the dollar
B. the dollar will depreciate relative to other currencies
C. the price of foreign goods will become cheaper to Canadians
D. the price of foreign goods will rise for Canadians - Starting from a position where the nation’s money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nation’s balance of payments would move into a surplus position if there occurred in the nation a (an) ?
A. increase in the money demand
B. decrease in the money demand
C. increase in the money demand
D. None of the above - Starting from a position where the nation’s money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?
A. decrease in the money supply
B. increase in the money supply
C. decrease in the money demand
D. None of the above - If Japan runs current account deficit and exchange rates are floating?
A. Japanese exports become more expensive to foreign buyers
B. Japanese exports become less expensive for foreign buyers
C. Japanese imports become less expensive for German buyers
D. Japanese imports become more prestigious to German buyers - Annual GNP growth of 6% poverty reduced by 1% point of the population Balance of payments deficit not in excess of $200 million For a planner, the above are ?
A. achieved only through socialism
B. target variables
C. bound by soft budget
D. recurrent expenditures - Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?
A. pegged of fixed exchange rates
B. adjustable pegged exchange rates
C. managed floating exchange rates
D. free floating exchange rates
