A Country's Freely Floating Currency Is Undervalued in Terms of Purchasing

question 15

Multiple Choice

a country's freely floating currency is undervalued in terms of purchasing power parity, its capital account is likely to be

• A) in deficit or tending toward a deficit
• B) in surplus or tending toward a surplus
• C) Subsidized by the International Monetary Fund
• D) a candidate for loans from the World Bank

Analyze the impact of external costs and benefits on market efficiency.

Differentiate between private and public goods and understand the role of property rights.

Examine the role of government in addressing market failures and providing public goods.

Explain the conditions under which markets fail to achieve economic efficiency.