Which of the Following Is the Intentional Lowering of a Currency's

question 56

Multiple Choice

Which of the following is the intentional lowering of a currency's value by its government?

• A)revaluation
• B)devaluation
• C)currency hedging
• D)currency arbitrage

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Definitions:

Purchasing Power Parity

A financial model that evaluates the currencies of various nations by using a "basket of goods" method, indicating that exchange rates need to balance out so the cost of the same goods is the same in different countries.

Russian Rubles

The currency used in Russia, symbolized as RUB.

Euros

The official currency of 19 out of the 27 member states of the European Union, also used as a major global currency for international trade and investment.

Purchasing Power Parity

An economic theory that states that the exchange rate between two currencies is equal to the ratio of the currencies' respective purchasing powers.