Which of the Following Is an Argument of Opponents of Devaluations

question 45

Multiple Choice

Which of the following is an argument of opponents of devaluations?

• A) A devaluation causes a nation with fixed exchange rates to lose credibility in the medium run, driving its interest rate higher.
• B) Participants in foreign exchange markets have a short memory: if the expected devaluation doesn't occur within a short time- period, they will stop expecting it.
• C) Devaluations cause relatively slow adjustments.
• D) Devaluations allow output to return to its natural level quickly.
• E) Both B and C.

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Definitions:

Ury's "Breakthrough Approach"

A conflict resolution method proposed by William Ury that emphasizes direct negotiation and creative problem-solving to overcome obstacles and reach agreement.

Difficult Conversation

A dialogue that is challenging to have due to the sensitive, emotional, or complex nature of the topics discussed.

Anticipation

The action of expecting or predicting future events or needs based on current knowledge or trends.

Negotiation Mismatch

A situation where the negotiating parties have significantly different expectations, understandings, or objectives, leading to difficulties in reaching an agreement.