Assume that the fixed exchange rate system of 100 pesos = 1 dollar is above the equilibrium exchange rate of 90 pesos= 1 dollar in a flexible exchange rate system.Then the dollar would be
A) undervalued and the peso would be overvalued.
B) overvalued and the peso would be undervalued.
C) revalued.
D) depreciated and the peso would be appreciated.
Correct Answer:
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Q15: A decline in the exchange rate means
Q16: Which of the following statements is (are)correct?
A)Under
Q17: The current account in a nation's balance
Q18: Assuming that the exchange rate rises by
Q19: What is the main cost of maintaining
Q21: The higher the exchange rate,the
A)the lower the
Q22: Assuming the United States sends foreign aid
Q23: An advantage of a flexible exchange rate
Q24: The current international monetary system is best
Q25: Assume that the fixed exchange rate system
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