-It Is Clear from the Diagram Above That,under Fixed Exchange

question 61

Multiple Choice

-It is clear from the diagram above that,under fixed exchange rates

• A) Germany has a balance-of-payments deficit and its currency is overvalued.
• B) Germany has a balance-of-payments surplus and its currency is overvalued.
• C) the United States has a balance-of-payments deficit and its currency is overvalued.
• D) the United States has a balance-of-payments surplus and its currency is overvalued.
• E) the United States must be giving up resources to purchase an excess supply of euros.

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Definitions:

Denial

A defense mechanism where a person refuses to accept reality or facts, blocking external events from awareness.

Defense Mechanism

Unconscious psychological strategies employed to protect oneself from anxiety or social sanctions and to provide a refuge from a situation with which one cannot currently cope.

Painful Realities

The acceptance or acknowledgment of difficult, distressing, or unpleasant truths or situations.

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.