What Is Likely to Happen If the Value of the Currency

question 12

Multiple Choice

What is likely to happen if the value of the currency falls?

• A) The prices of imports are likely to fall.
• B) The volume of imports is likely to rise.
• C) The price of exports abroad is likely to fall.
• D) The volume of exports is likely to fall.

---

Definitions:

Banking Regulators

Agencies or bodies responsible for overseeing banks and ensuring the stability, safety, and compliance of the banking sector.

Federal Funds Market

A financial market that allows banks to borrow or lend excess reserves to one another, typically overnight, at an interest rate called the federal funds rate.

Discount Window

A monetary policy tool used by central banks, providing short-term loans to commercial banks to help them meet reserve requirements or alleviate liquidity shortages.

Reserve Deficiency

A situation in which a bank does not have enough reserves to meet the central bank's requirements.