If a Country with High Unemployment, a Balance of Payments

question 40

Multiple Choice

If a country with high unemployment, a balance of payments deficit, and fixed exchange rates decides to abandon it fixed exchange rate and allow its exchange rate to float, which among the following will be a probable effect?

• A)Its currency will depreciate, increasing international competitiveness and leading to higher aggregate demand and an improvement in the current account.
• B)Its currency will appreciate, increasing international competitiveness and leading to higher aggregate demand and an improvement in the current account.
• C)Its currency will depreciate, decreasing international competitiveness and leading to lower aggregate demand and an improvement in the current account.
• D)Its currency will appreciate, decreasing international competitiveness and leading to lower aggregate demand and a worsening of the current account.

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Definitions:

Mission, Vision

The fundamental objectives and aspirational goals set by an organization to guide its strategic direction and decision making.

Trend Analysis

A method used to predict future movements by examining historical data.

Markov Analysis

A statistical method used to predict future behaviors based on current and historical data, especially in decision-making and forecasting scenarios.

Staffing Tables

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