Under a Floating Exchange Rate Regime with a High Degree

question 45

Multiple Choice

Under a floating exchange rate regime with a high degree of capital mobility, in the short run an expansionary fiscal policy will most likely create pressure on:

• A)the domestic currency to appreciate.
• B)the domestic currency to depreciate.
• C)monetary authorities to revalue the domestic currency.
• D)monetary authorities to devalue the domestic currency.

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Definitions:

Racism

Prejudice, discrimination, or antagonism directed against individuals of different races based on the belief that one's own race is superior.

Abolitionists

Activists who campaigned for the immediate end of slavery and the emancipation of slaves, particularly prominent in the 19th century.

Morally Wrong

Actions or behaviors that are considered unethical or evil according to societal, cultural, or personal standards.

Economic Threat

A potential risk that could negatively impact the economic stability or growth of a country or region.