Consider a country that is operating under a fixed exchange-rate system.The country's balance of payments will always show total debits equal to total credits because
A) fluctuations in exchange rates will bring debits and credits into equality.
B) any official financing required to maintain the fixed exchange rate will offset any deficit or surplus in the rest of the balance of payments accounts.
C) short-term capital flows will always offset any deficit or surplus in current accounts and long-term capital accounts.
D) the official financing account will always offset a deficit or surplus in the current account.
E) fluctuations in interest rates will bring debits and credits into equality.
Correct Answer:
Verified
Q101: Suppose the Bank of Canada raises its
Q102: World commodity prices increased significantly over the
Q103: If the central bank pegs the exchange
Q104: Suppose two countries,A and B,are trading with
Q105: If the Bank of Canada pursues a
Q107: If the central bank pegs the exchange
Q108: Suppose the Bank of Canada fixes the
Q109: The Chinese government fixes its exchange rate
Q110: Suppose Canada's central bank fixes the Canada-U.S.exchange
Q111: Suppose the Bank of Canada raises its
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents