Which of the following will NOT contribute to the appreciation of a currency? Persistent trade deficit...

Which of the following will NOT contribute to the appreciation of a currency?

Persistent trade deficit

Rampant corruption

Low interest rates

Social unrest

High inflation

Expert Solution

Persistent trade deficit will be leading to lower exchange rate and it will be a weakening the domestic currency because when there will be higher amount of trade deficit in the country, it will lead to weakening the currency and it will not be leading to appreciation of the currency.

Correct answer will be option (A ) persistent trade deficit

jeff jeffy answered 2 years ago

How can you explain a persistent/sustained US trade deficit?

A trade deficit implies which of the following? an outflow of financial capital. an inflow of...

A trade deficit implies which of the following? an outflow of financial capital. an inflow of financial capital. imports result in fewer jobs in the domestic economy. Foreigners profit at the expense of the domestic economy.

how can impact of appreciation of currency on exports be decreased

Following an increase in the Canadian budget deficit, it has been observed that the trade deficit...

Following an increase in the Canadian budget deficit, it has been observed that the trade deficit has increased, the Canadian real exchange rate has appreciated, the net capital outflow has decreased, and the interest rate has decreased. Which one of these events is contrary to what the open-economy macroeconomic model predicts concerning the effects of an increase in the budget deficit? a. The interest rate has decreased. b. The real exchange rate has appreciated. c. The net capital outflow has...

QUESTION 5 A weaker currency tends to cause a larger trade deficit. True False QUESTION 6...

QUESTION 5 A weaker currency tends to cause a larger trade deficit. True False QUESTION 6 To guard against the risk of the currency strength fluctuating, a business could sign a contract now that sets a specified exchange rate that will be used for a future payment. True False QUESTION 7 Suppose that goods in a foreign country are expensive from a domestic country perspective. This means that, a. the domestic currency is relatively weak and real exchange rate for...

what is the effect of a real appreciation of the domestic currency on the purchasing power...

what is the effect of a real appreciation of the domestic currency on the purchasing power of domestic residents?

A large and persistent external deficit often leads to calls for policy measures such as bilateral...

A large and persistent external deficit often leads to calls for policy measures such as bilateral trade negotiations, tariffs and important quotas, directed at restoring balance between exports and imports. However, current account deficits ultimately reflect a disparity between savings and investment; fundamental national income accounting identities ensure that the current account is equal not only to the difference between exports and imports, broadly defined, but also to the difference between savings and investment (Krugman 1991). Therefore, the issue of...

Analyze the implications of currency appreciation and depreciation for Globalization, and explain how the weakening of...

Analyze the implications of currency appreciation and depreciation for Globalization, and explain how the weakening of the U.S. dollar will make U. S. companies more attractive to foreign investors.

The appreciation of a country's currency: Select one: A) reduces the price of your exports and...

The appreciation of a country's currency: Select one: A) reduces the price of your exports and imports B)increases the price of your exports and does not affect the price of your imports C)reduces the price of its exports and increases the price of its imports D)increases the price of your exports and reduces the price of your imports

Question

Which of the following will NOT contribute to the appreciation of a currency? Persistent trade deficit...

Solutions

Expert Solution

Related Solutions

How can you explain a persistent/sustained US trade deficit?

How can you explain a persistent/sustained US trade deficit?

A trade deficit implies which of the following? an outflow of financial capital. an inflow of...

how can impact of appreciation of currency on exports be decreased

Following an increase in the Canadian budget deficit, it has been observed that the trade deficit...

QUESTION 5 A weaker currency tends to cause a larger trade deficit. True False QUESTION 6...

what is the effect of a real appreciation of the domestic currency on the purchasing power...

A large and persistent external deficit often leads to calls for policy measures such as bilateral...

Analyze the implications of currency appreciation and depreciation for Globalization, and explain how the weakening of...

The appreciation of a country's currency: Select one: A) reduces the price of your exports and...