Which of the Following Statements Regarding Exchange Rate Intervention Is

question 127

Multiple Choice

Which of the following statements regarding exchange rate intervention is FALSE?

• A)A devaluation can be used to increase exports and reduce imports.
• B)A devaluation can be used to eliminate a recessionary gap.
• C)A revaluation can be used to eliminate a recessionary gap.
• D)Devaluations and revaluations can be used to eliminate shortages or surpluses in the foreign exchange market.

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Definitions:

Operating Activities

Activities that relate directly to the business's primary operations and functions, including sales, distribution, and production, influencing the day-to-day profitability.

Cash Receipts

The collection of money, including cash and checks, received by a business during a specific period.

Plant Assets

Long-term tangible assets used in the production of goods and services, such as buildings, machinery, and equipment.

Cash Flows

The net amount of cash and cash equivalents being transferred into and out of a business.