What Would Happen to a Low-Income Nation If Its Liability

question 77

Multiple Choice

What would happen to a low-income nation if its liability currency appreciated against its own currency?

• A) Its external wealth would rise because low-income nations have more assets than liabilities.
• B) Its external wealth would not be affected because currency values are fixed.
• C) Its external wealth would fall because low-income nations tend to have more external liabilities denominated in other currencies.
• D) Its external wealth would rise because of the ability of its monetary authority to print more money.

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