If a Government with a Fixed Exchange Rate Chooses to Increase

question 116

Multiple Choice

If a government with a fixed exchange rate chooses to increase the rate, its currency:

• A) will be revalued.
• B) will be devalued.
• C) will depreciate.
• D) will appreciate.

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Definitions:

Last Dividend

The most recent dividend payment made to shareholders by a company.

Dividend Growing

The increase in the amount of dividend payouts by a company over time.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used to assess the return on investment in bonds.

Required Rate

The minimum expected rate of return by investors for providing capital to a company, often used in valuing investments.