When Faced with a Continual Excess Demand for Foreign Exchange

question 26

Multiple Choice

When faced with a continual excess demand for foreign exchange, which of the following options can the government choose to eliminate the disequilibrium situation?

• A)increase the peg or devalue
• B)engage in fiscal policy and raise the country's income level
• C)engage in monetary policy and lower interest rates
• D)increase the inflation rate
• E)decrease the peg or revalue

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Definitions:

Primary Drives

Basic, innate urges such as hunger, thirst, and the desire for warmth, crucial for survival.

Affiliation Motive

An inherent desire to belong to a group or form close personal relationships and social connections.

Innate Drive

An internal motivated force that drives individuals to fulfill basic physiological and psychological needs.

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues and the promotion of secondary sexual characteristics.