The Expectation of Future Revaluation Causes a Balance of Payments

question 40

Multiple Choice

The expectation of future revaluation causes a balance of payments crisis marked by

• A) a sharp rise in reserves and a fall in the home interest rate below the world interest rate.
• B) a sharp fall in reserves and an even bigger fall in the home interest rate below the world interest rate.
• C) a sharp fall in reserves and a rise in the home interest rate above the world interest rate.
• D) a sharp rise in reserves and an even greater rise in the home interest rate above the world interest.
• E) a sharp fall in reserves and an unchanged home interest rate.

---

Definitions:

Processed Material

Material that has undergone a manufacturing process to change its properties or form for specific uses.

Product Mix

All the products offered by an organization.