Which of the following is likely to cause a depreciation of the domestic currency? expansionary monetary...

Which of the following is likely to cause a depreciation of the domestic currency?

		expansionary monetary policy
		contractionary monetary policy
		expansionary fiscal policy.
		rising domestic interest rates.

Solutions

Expert Solution

Rising domestic interest rates.

Explanation:

Depreciation of domestic currencies occurs when there is decline in the value of domestic currency in relation to any other foreign currency.Rising domestic interest rate is likely to cause a depreciation of the domestic currency due to expected higher rate of inflation,thus it has triggering effect in the depreciation of domestic currency.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

15. Which of the following is most likely to cause the depreciation of the Canadian dollar?...

15. Which of the following is most likely to cause the depreciation of the Canadian dollar? a. an American-owned company buys Canadian oil b. a Canadian farmer relies on exports c. a Canadian businessman on an extended trip through Africa d. a German family on vacation in Quebec 16. If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate? a. a...

A depreciation of the domestic currency can be caused by ________. 1. a decrease in the...

A depreciation of the domestic currency can be caused by ________. 1. a decrease in the domestic interest rate and the expectation of an increase in the value of the domestic currency. 2. a decrease in the domestic interest rate and expectation of a decrease in the value of the domestic currency. 3. the expectation of an increase in the value of the domestic currency. 4. an increase in the domestic interest rate.

1. “The direction of the effects of an expected future depreciation of the currency on domestic...

1. “The direction of the effects of an expected future depreciation of the currency on domestic real GDP depends on whether a country is maintaining fixed or floating exchange rates.” Do you agree or disagree? Explain.

3) explain the effect of expansionary domestic monetary policy in a country with fixed exchange rates....

3) explain the effect of expansionary domestic monetary policy in a country with fixed exchange rates. explain the linkages as the money moves through the economy and has its effects on the capital and current accounts as well as on domestic spending. Is the monetary policy enhanced or made weaker by the fixed exchange rate? explain 4) explain the effect of expansionary domestic fiscal policy in a country with fixed exchange rates. explain the linkages as the changes move through...

1) explain the effect of expansionary domestic monetary policy in a country with flexible exchange rates....

1) explain the effect of expansionary domestic monetary policy in a country with flexible exchange rates. explain the linkages as the money moves through the economy and has its effects on the capital and current accounts as well as on domestic spending. Is the monetary policy enhanced or made weaker by the flexible exchange rate? explain 2) explain the effect of expansionary fiscal policy in a country with flexible exchange rates. explain the linkages as the changes move through the economy...

Q19 Time lags in expansionary monetary policy can cause Question 19 options: short-term monetary policy to...

Q19 Time lags in expansionary monetary policy can cause Question 19 options: short-term monetary policy to work more effectively than long-term targeting. difficulty in the timing of appropriate policy and can even lead to destabilization. an undesirable inflationary gap if there is an unexpected increase in exports. monetary expansions to work very quickly but cause monetary contractions to work very slowly. Both (B) and (C).

Which of the following is likely to cause an interruption of water transport in the xylem?...

Which of the following is likely to cause an interruption of water transport in the xylem? a. None of these options: water is primarily transported in the phloem. b. death of xylem cells c. hydrogen bonding between water molecules and the xylem cell walls d. the absence of a Casparian strip e. air bubbles forming in the xylem

1. Which of the following is more likely to cause urinary tract infections?

1. Which of the following is more likely to cause urinary tract infections? A) fimbriated strains of Escherichia coli B) non-fimbriated strains of Escherichia coli C) both fimbriated and non-fimbriated strains of Escherichia coli D) None of the answers are correct. 2. Capsules are particularly important for... A) making bacteria more vulnerable to host defense mechanisms. B) making bacteria less pathogenic. C) protecting bacteria from host defense mechanisms. D) allowing bacteria to become more phagocytic. 3. Pathogenicity is the...

Which of the following would most likely cause both a decrease in the price of McDonalds’...

Which of the following would most likely cause both a decrease in the price of McDonalds’ Big Mac hamburgers and a decrease in the number sold? a. an increase in the supply of McDonalds’ Big Mac hamburgers b. an increase in the demand for McDonalds’ Big Mac hamburgers c. a decrease in the supply of McDonalds’ Big Mac hamburgers d. a decrease in the demand for McDonalds’ Big Mac hamburgers

43. Which of the following is LEAST likely to be a cause of long-term secular slowness...

43. Which of the following is LEAST likely to be a cause of long-term secular slowness in increases in U.S. labor productivity? (a) transition of the economy increasingly toward services and away from manufacturing; (b) falling levels of the capital to labor ratio; (c) deglobalization and the shift of production from places outside the U.S. to places within the U.S.; (d) tighter labor markets and the infusion of more and more workers with below-average skills. 44. Which of the following...

Subjects