QUESTION 3 A revlaution of domestic currency is accomplished when O a. the marke

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QUESTION 3 A revlaution of domestic currency is accomplished when O a. the market equilibrium value of the currency goes down. O b. the central bank lowers interest rates by increasing the money supply c.the central bank raises interest rates by decreasing the money supply. o d. the market equilibrium value of the currency goes up. QUESTION 4 Which exchange-rate system does not require monetary reserves for official exchange-rate intervention? a. Dual exchange rates O b. Floating exchange rates O C. Pegged exchange rates O d. Managed floating exchange rates

Explanation / Answer

3) D. A revaluation of domestic currency means the value of domestic currency has increased in the fixed exchange rate regime.

4) B. Floating exchange rate or flexible exchange rate regime is a exchange rate system in which currency exchange rate fluctuate according to market condition and there is no requirement of reserves.

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