Post by: Jkov05 on Mar 16, 2019
Question 1
Figure 19-10
Refer to Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate was $2 per pound in the figure above, and equilibrium persisted at $3, then this was evidence of ________ and the IMF would allow a ________ in the exchange rate.
◦ fundamental disequilibrium; revaluation
◦ fundamental disequilibrium; devaluation
◦ fundamental overvaluation; devaluation
◦ fundamental overvaluation; revaluation
Question 2
Figure 19-10
Refer to Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate was $2 per pound in the figure above, and equilibrium persisted at $3, then a revaluation of the currency would have
◦ increased the price of British exports to the United States.
◦ increased the price of imports to Britain.
◦ led to a current account surplus.
◦ led to a balance of trade surplus.
Post by: ultraflyy23 on Mar 16, 2019
Answer 1
fundamental disequilibrium; revaluationAnswer 2
increased the price of British exports to the United States.Post by: Jkov05 on Mar 16, 2019
Post by: ultraflyy23 on Mar 16, 2019