• 2022-06-06
    When a country under a floating exchange rate regime has a deficit in the balance of payments, the government could change in foreign exchange reserves and money supply to affect economic indicators, and further improve its status of balance of payments disequilibrium. ()
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    • 0

      The Marshall-Lerner condition can be used to determine ( ). A: Balance of payments B: Impact degree of currency depreciation on international balance of payments C: The impact of exchange rate fluctuations on international balance of payments D: Degree of currency depreciation

    • 1

      Under a floating exchange rate, the government or central bank ties the official exchange rate to another country's currency or to the price of gold.

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      ‏Which one is not a disadvantage of a freely floating exchange rate system?‍ A: It can adversely affect a country that has high unemployment. B: It can adversely affect a country that has high inflation. C: The government may intervene to change the value of a given currency. D: The exchange rate risk is high and may be costly to manage.

    • 3

      The measures that can be taken to reduce the current account deficit or improve the current account balance are ( ). A: Reducing consumption or investment expenditure B: Depreciation of the local currency exchange rate C: Cutting government expenditure D: Appreciation of the exchange rate of the local currency

    • 4

      Under a floating exchange regime, the government and central bank never intervenes in the currency market.