Which Statement Regarding Exchange Rate Intervention Is FALSE

question 315

Multiple Choice

Which statement regarding exchange rate intervention is FALSE?

• A) A devaluation can be used to increase exports and reduce imports.
• B) A devaluation can be used to eliminate a recessionary gap.
• C) A revaluation can be used to eliminate a recessionary gap.
• D) Devaluations and revaluations can be used to eliminate shortages or surpluses in the foreign exchange market.

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Definitions:

Completion Times

The duration required to finish a task or process from start to end.

Logarithm

The exponent or power to which a base must be raised to produce a given number.

Logarithm Re-Expression

The process of applying a logarithmic transformation to a dataset to stabilize variance and make the data more normally distributed.

Company's Assets

Resources owned by a company that have economic value and can be converted into cash, including property, inventory, and patents.