614 #
© 2014 Pearson Canada Inc.#
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
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
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
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