What is the difference between depreciation and devaluation? O There is no difference. O Depreciation refers to a fixed exchange rate, while devaluation refers to a floating exchange rate. O Depreciation refers to a floating exchange rate, while devaluation refers to a fixed exchange rate.

What is the difference between depreciation and devaluation? O There is no difference. O Depreciation refers to a fixed exchange rate, while devaluation refers to a floating exchange rate. O Depreciation refers to a floating exchange rate, while devaluation refers to a fixed exchange rate.

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 16RQ: Does a higher rate of return in a nations economy, all other things being equal, affect the exchange...

See similar textbooks

Related questions

Q: 'Credit' means Increase in an account Decrease in an account Right side of an account Left side of…

A: Accounting is basically a system that is used to record, summarize, and organize financial or…

Q: Should DAMC consider other foreign investment strategies, like strategic alliance, joint venture…

A: Even though the pandemic represents a "detour" from the globalization trend, DAMC should investigate…

Q: Three firms are bidding for the rights to provide cable television services. The demand for cable…

A: Given, Demand function : P = 100 - Q Firm 1 AC : AC1 = 10 Total Cost = 10 Q Firm 2 AC : AC 2 =…

Q: In the short run, the technological change will cause the price to fall from P₂ to P₂- In the short…

A: In the short-run, the technological improvement is difficult and the inputs are constant supply not…

Q: Use the table below to answer questions about Christina's Christmas Wreaths. Christina operates in a…

A: We have given price = 64 for product the product. Due to given price, MR becomes equals to the…

Q: Many trade instruments protect domestic producers at the expense of consumers. Which of the…

A: When a government proclaims itself a rule maker or market regulator, it is expected to intervene…

Q: 12. Which monetary policy tool did the US Federal Reserve introduce most recently? a. Required…

A: Federal Reserve is central bank of USA. It is apex monetary institution in country. It has been…

Q: Which of the following would cause the supply of U.S. dollars in the forex market to decrease?…

A: The higher interest rate will attract foreign investments in a domestic country. If the interest…

Q: 1. Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: How does the government budget deficit impact interest rates, investment, and economic growth?…

A: Government Budget deficit When spending surpass receipts, a budget deficit occurs, and it can be a…

Q: Use the equal marginal principle in production to explain the effects of these government policies:…

A: With two factors of production, we have price if labor is w and price of capital is r.

Q: Discuss the impact of long run on cost of doing business.

A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…

Q: 2. Consider the two-by-two bimatrix game listed below: Left Right Up Down (1,-1) (2,-2) (3,-3)…

A: Mixed strategy equilibrium is a randomization of pure strategy equilibrium. Let the probability with…

Q: Consider the market for a good X. Suppose that P0=$8, P1=$25, PB=$22 , PA=$10, and equilibrium price…

A: Given; P0=$8P1=$25PB=$22PA=$10Equilibrium price; P*=$15Q0=100 To find:- Gain from trade of the 100th…

Q: Next, consider a case that the integrated firm produce the product and sell directly to consumers.…

A: Introduction Here we have a case of integrated market where firm produces the product and sell…

Q: Use the information in the table to answer the following questions. All numbers are in billions of…

A: Aggregate spending is the sum of consumption, investment, government spending and net exports in an…

Q: Discuss the features of the IS-LM-FE model and explain how the model’s assumptions on the…

A: The IS-LM-FE macroeconomic model is likely the most basic, but it covers many of the most essential…

Q: O a. is a fixed charged levied on imports while is a fraction of the cost of imports.…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Kyle is a grade 5 student currently taking his modular class at home since the pandemic happened in…

A: Between 5th and high school its 7 years Amount saved = 500Php twice a month Interest rate (i) =…

Q: By the 1970s, women's rights reemerged as a powerful movement, usually focusing on: O Expanding…

A: The answer is - Option 4. Inequalities in pay and workplace discrimination

Q: A T-shirt screener can screen t-shirts (q) in two different ways. He can either use a fast screening…

A: Given production function is perfect substitution production function for F and S

Q: Menchie bought his brother a laptop 5 years ago which has a cost of around 25,000PhP. The laptop’s…

A: The given variables are: Initial cost = PhP 25,000 Life = 10 years Semi annual maintenance after 5…

Q: Unemployment and the Labor Market-Work It Out: Question 2 Consider an economy with the Cobb-Douglas…

A: Since you haven't mention anything, I'm assuming you need the answer for 3rd part only.

Q: 1) Suppose that market demand is linear, q = 70 - p. Marginal costs are constant and equal to 10.…

A: We have two monopolist at different stages of production and sales.

Q: What is the U.S 6 month interest rate?

A: In the mentioned question we have been asked about the 6-month interest rate of the U.S.

Q: The Volkswagen investement with Ghana. What are the strategic impacts in terms of foreign exchange…

A: Foreign exchange rate The foreign exchange rate is the rate at which the currency of one country…

Q: In the multiple regression model, the assumption of no perfect collinearity is best described as:…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Morty is looking into buying an apartment. He checked out a few places recently, and it looks like…

A: At the marketplace, an individual haveto make purchase or sale decision based on various economic…

Q: EXHIBIT #1 Price Quantity TC $10 40 $374 $10 41 $376 $10 42 $360 $10 43 $365 $10 44 $390 $10 45 $400…

A: Answer; Q2) Option (b) 43 units is correct

Q: 1. What is the effect of monetary policy in the short run?

A: Dear Student as you have posted multiple questions, but according to our policies and guidelines we…

Q: Consider the following demand curve for good X which is produced by Firm 1 and 2: Price=100-2*0₁-2₂…

A: We have two firms with same demand and different cost functions.

Q: Suppose the annual welfare benefit formula is Benefit = $4,000 0.67(Wages > $2,000) Instructions:…

A: Given: Benefit=4000-0.67(Wages>2000) The tax rate that depicts additional tax that is being paid…

Q: A baker uses labor (L) and raw materials (M) to produce mini Muhlenberg Mule sugar figurines (q).…

A: f(L, M) = L 0.50M. Let wL and wM denote the prices of a unit of L and M,

Q: Suppose the money multiplier is 2 and remains constant. If the Fed buys $1,000 of Treasury…

A: Fed is the central bank of United States and is an open market operations committee.

Q: 34. The natural unemployment rate for a country is 6%. If the country's potential GDP is 55000 and…

A: Answer; 34) Option (e) None of the above is correct

Q: Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers…

A: A sales representative is trying to sell a company a new accounting system that will reduce the…

Q: 61. The total demand for money curve will increase (as a result of): A. if investors perceive less…

A: At the marketplace, money demand refers to the amount of money held by the people to make different…

Q: Assume a company commenced operations on January 1, 2019. Its accounting records showed the…

A: Answer :- Option 4th is correct = $11,000 Formula :- Retained Earnings = Opening balance + Net…

Q: What is the economic argument for government-funded preschool and community college? Consider AS and…

A: Education is fundamentally a state liability toward the general population. Most nations on the…

Q: In 2021, the exchange rate between the Swedish Kronor (SK) and the $ dollar was Es/SK = 0.07 $,…

A: The rate at which one currency is exchanged for another is known as an exchange rate. National…

Q: All of the following are risks of pricing too high, except O Low, unsatisfactory demand O Customer…

A: In the market, firms use different pricing strategies based on their specific market and…

Q: In the short run, if the central bank decreases the money supply, the currene will and output will…

A: Central bank can control money supply in an economy by open market operations, required reserve…

Q: Poland, after its transformation into a market economy in the early 90's, has consistently been…

A: Economy: It refers to the place under which the people exchange goods and services. The economy is…

Q: Explain methods of managing possible solutions for the tragedy of the commons

A: The tragedy of the commons is a state of affairs in which everyone has an incentive to use a…

Q: Roxanne is considering chipping in to pay for some tree trimming in her neighborhood. If the trees…

A: The value or pleasure a client may get from a service or commodity is referred to as utility in…

Q: Question 28 In 2020, the US economy experienced a negative shock on aggregate supply as well as a…

A: Equilibrium in the goods market occurs at the intersection of aggregate demand and aggregate supply…

Q: For the same demand and cost conditions, which of the following is true? Group of answer…

A: In a monopoly, there is a single firm producing unique product which allows it to have full control…

Q: apan employed strategic trade policy to further its national interests. Give an example of an…

A: The government began a gradual trade liberalization policy in the 1960s. It ease import quotas,…

Q: Question 41 We found in our Ricardian lecture that the pattern of trade between countries was…

A: The measure that depicts the exchange of goods and services between two countries is known as trade.…

Q: Define each of the following markets: Monopoly, Perfect competition, Monopolistic Competition, or…

A: Monopoly is a type of market in which there is single seller of the product. It means that product…

Question

What is the difference between depreciation and devaluation?
O There is no difference.
O Depreciation refers to a fixed exchange rate, while devaluation refers to a floating
exchange rate.
O Depreciation refers to a floating exchange rate, while devaluation refers to a fixed
exchange rate.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

What is exchange rate?

VIEW

Correct answer

VIEW

Incorrect options

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Does a higher rate of return in a nations economy, all other things being equal, affect the exchange rate of its currency? If so, how?
Which of the following statement is incorrect? O Most of the answers are correct. O Diversifying investments across several countries often reduces risk. The absolute purchasing power parity theory posits that exchange rates are determined by the differences in the prices of a given market basket of traded goods and services when there are no trade barriers. O An exchange rate of two currencies found by using a common third currency is known as an interest rate. O Exchange rates can be expressed as the number of units of the domestic currency per one unit of the foreign currency.
How does the appreciation of a currency affect the balance of payments? a. Appreciation of a currency decreases current accounts as exports fall and imports rise O b. Appreciation of a currency decreases current accounts as both exports and imports fall O c. Appreciation of a currency increases current accounts as both exports and imports rise O d. Appreciation of a currency increases current accounts as exports fall and imports rise All of the following fall under the Philippines' capital account except for a. OFW remittances O b. Cash aid from the US for families affected by typhoon Odette O c. Stocks O d. All of the above
What is the exports effect? The exports effect is the result that the lower the exchange rate, other things remaining the same, the O A. higher are the prices of Canadian-produced goods and services to foreigners and the greater is the volume of Canadian imports O B. lower are the prices of foreign-produced goods and services to Canadians and the greater is the volume of Canadian exports O C. higher are the prices of foreign-produced goods and services to Canadians and the greater is the volume of Canadian imports O D. lower are the prices of Canadian-produced goods and services to foreigners and the greater is the volume of Canadian exports Click to select your answer and then click Check Answer. All parts showing Clear All Check Answer P Type here to search 立

On the foreign exchange market, an increase in a country's exchange rate O a. decreases the demand for its currency and shifts the demand curve leftward. O b. decreases the quantity demanded of its currency and leads to a movement up along the demand curve. decreases the demand for its currency and shifts the demand curve rightward. O d. increases the quantity demanded of its currency and leads to a movement down along the demand curve. O . increases the quantity demanded of its currency and leads to a movement up along the demand curve.
Determine which account of the Balance-of-Payments is affected the following transaction: A local parent sends 500 Euros to his/her son who is studying engineering at a German university. Select one: O a. Capital Account Foreign Direct Investment O b. Current Account Transfers O c. Capital Account Portfolio Investment O d. Current Account Imports O e. Current Account - Exports re to search
On the DD curve, exchange rate depreciation causes output to because it affects a component of aggregate demand. O rise; consumption O rise; the current account O fall; investment fall; the current account
A change in the euro-dollar exchange rate from $1 per epro to $2 per euro would price of German goods, the number of German goods that would be demanded in the U.S. the U.S. O decrease; reducing. O decrease; increasing. O increase; reducing. O increase; increasing.
A balance of payments is O the arbitrage potential caused by difference in real prices of goods in different countries. O a register of all trade between two nations. O a record of all payments between one nation and the rest of the world. O the account of all payments for goods and services from one nation to another. O the difference in exchange rates between two currencies.
QUESTION 50 Which of the following could be a consequence of a depreciation of the United Kingdom exchange rate? O a. John, a French citizen, decides that Cornish pasties in the United Kingdom have become too expensive and cancels his order. O b. Both (b) and (c). O c. Roberta, a United Kingdom citizen, decides to import fewer windshield wipers for her auto part company. O d. Nick, a United Kingdom citizen, decides that the trip to Nepal he has been thinking about is now made affordable by the depreciation.
increases the supply of dollars in the foreign exchange market. O a. A rise in the expected future exchange rate O b. A rise in the interest rate in the U.S. relative to the interest rate in other countries An increase in the exchange rate O d. A decrease in the exchange rate A fall in the interest rate in the U.S. relative to the interest rate in other countries O e.
Which is an incorrect statement about the balance of payments accounts? O A. Any transaction involving a flow of funds out of a country is a negative item in the country's balance of payments. B. The balance of payments accounts consist of the current account and the financial account. c. The financial account measures a country's trade in currently produced goods and services. O D. Any transaction involving a flow of funds into a country is a positive item in the country's balance of payments.