What will happen if the people expects that the value of a currency will increase? a. There will be new monetary policies b. The supply of that currency will rise c. There will be no effect d. The demand for that currency will rise

What will happen if the people expects that the value of a currency will increase? a. There will be new monetary policies b. The supply of that currency will rise c. There will be no effect d. The demand for that currency will rise

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...

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Question

What will happen if the people expects that the value of a currency will increase?

a.
There will be new monetary policies

b.
The supply of that currency will rise

c.
There will be no effect

d.
The demand for that currency will rise

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

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