Q.

Which one of the following statements is the most accurate?

A. A devaluation occurs when the central bank lowers the domestic currency price of foreign currency, E, and a revaluation occurs when the central bank raises E.
B. A devaluation occurs when the central bank raises the domestic currency price of foreign currency, E, and a revaluation occurs when the central bank lowers E.
C. Devaluation occurs when the domestic currency price of foreign currency, E, is raised, and a revaluation occurs when E is lower
Answer» B. A devaluation occurs when the central bank raises the domestic currency price of foreign currency, E, and a revaluation occurs when the central bank lowers E.
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