An Overvalued Currency Arises When

question 53

Multiple Choice

An overvalued currency arises when

• A)the demand for the currency exceeds the supply.
• B)the Central Bank gains reserves while maintaining the exchange rate.
• C)the Central Bank keeps the official rate above the fundamental value.
• D)the Central Bank keeps the official rate below the fundamental value.

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Definitions:

Stop-Payment Order

a request made to a bank by an account holder not to pay a check that has been issued but not yet cashed.

Loss

A decrease in value, resources, or money typically as a result of a business transaction, investment, or unforeseen events.

Postdated

Pertaining to a check or other document that bears a date later than the actual date it was written, to be cashed or deposited at that later date.

Liable

Legally responsible or obligated, as in being held accountable for an action or in relation to a debt or infringement.