the economics of money, banking, and financial markets

614 #

© 2014 Pearson Canada Inc.#

20. 
    

    Under a fixed exchange rate regime, a country that depletes its international reserves in an
    attempt to keep its currency from ____ will be forced to ____ its currency.
    A) depreciating; revalue
    B) depreciating; devalue
    C) appreciating; revalue
    D) appreciating; devalue
    Answer: B
    Diff: 2 Type: MC Page Ref: 527 - 528
    Skill: Recall
    Objective List: 20.3 Summarize the arguments for and against capital controls

    
    


21. 
    

    Under a fixed exchange rate regime, a central bank that does not want to acquire
    international reserves to keep its currency from ____ will decide to ____ its currency.
    A) depreciating; revalue
    B) depreciating; devalue
    C) appreciating; revalue
    D) appreciating; devalue
    Answer: C
    Diff: 2 Type: MC Page Ref: 527 - 528
    Skill: Recall
    Objective List: 20.3 Summarize the arguments for and against capital controls

    
    


22. 
    

    Under a fixed exchange rate system, countries that ran large, persistent balance of payments
    deficits would ____ international reserves, thereby pressuring them into ____ their
    exchange rate.
    A) gain; devaluing
    B) gain; revaluing
    C) lose; devaluing
    D) lose; revaluing
    Answer: C
    Diff: 2 Type: MC Page Ref: 527 - 528
    Skill: Recall
    Objective List: 20.3 Summarize the arguments for and against capital controls

    
    


23. 
    

    Under a fixed exchange rate system, countries that ran large, persistent balance of payments
    surpluses would ____ international reserves, thereby pressuring them into ____ their
    exchange rate.
    A) gain; devaluing
    B) gain; revaluing
    C) lose; devaluing
    D) lose; revaluing
    Answer: B
    Diff: 2 Type: MC Page Ref: 527 - 528
    Skill: Recall
    Objective List: 20.3 Summarize the arguments for and against capital controls