An Excess Demand for Foreign Currency at Current Exchange Rates

question 37

Multiple Choice

An excess demand for foreign currency at current exchange rates is known as a

• A)Balance-of-payments deficit.
• B)Trade deficit.
• C)Balance-of-payments surplus.

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Definitions:

Compounded Semiannually

Interest calculation method where the interest rate is applied twice a year, resulting in interest on interest being added to the principal.

Monthly Compounded

Monthly Compounded refers to the process of applying interest to an initial sum and its previously accumulated interest at monthly intervals.

GIC

Guaranteed Investment Certificate; a Canadian investment that offers a guaranteed rate of return over a fixed period.

Maturity Value

The amount payable to an investor at the end of a fixed term investment, including principal and interest.