Suppose the Government of New Country Fixes the Exchange Rate

question 100

Multiple Choice

Suppose the government of New Country fixes the exchange rate of its currency, the Newo, in terms of the U.S. dollar. Initially the exchange rate is set at $0.50 per Newo. Later the government changes the exchange rate to $0.75 per Newo. This is an example of a(n) :

• A)appreciation.
• B)depreciation.
• C)devaluation.
• D)revaluation.

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Definitions:

Preliminary Sketch

A rough drawing used to prepare for a more detailed artwork later.

Wat Chai Wattanaram

A historic Buddhist temple located in Ayutthaya, Thailand, known for its distinctive Khmer architecture and as a major monument of the Ayutthaya kingdom.

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