Under Flexible Exchange Rates,a Trade Deficit Is Automatically Corrected by a Deprecation

question 19

True/False

Under flexible exchange rates,a trade deficit is automatically corrected by a deprecation of the deficit nation's currency.

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Definitions:

Investment Grade

A credit rating indicating a low risk of default, used to classify bonds that are considered safe investments.

BBB

A bond credit rating given to a medium credit quality debt instrument, indicating moderate risk.

Primary Market Transaction

Deals with the issuance of new securities directly from the issuer to investors.

Secondary Market Transaction

The buying and selling of previously issued securities, such as stocks and bonds, between investors, rather than directly from issuing companies.