An Increase in the Current Account Deficit Will Place ____

question 16

Multiple Choice

An increase in the current account deficit will place ____ pressure on the home currency value, other things equal.

• A) upward
• B) downward
• C) no
• D) upward or downward (depending on the size of the deficit)

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Definitions:

Critical Evaluations

The process of rigorously and systematically examining an object, situation, or outcome to judge its merit, significance, or value based on criteria.

Influence

The capacity or power of individuals or groups to affect the behaviors, beliefs, or decisions of others.

Control

The power to influence or direct people's behavior or the course of events.

Legitimate Power

A form of authority derived from a position or role that gives the holder the right to make decisions, command, and influence others.