Which of these is not a positive aspect of currency depreciation? Attract touris

Question

Which of these is not a positive aspect of currency depreciation? Attract tourists Keeps export prices low Easier to sell goods in foreign markets Enhances investor confidence in currency The difference between the bid price and the offer price is called: spread arbitrage rate hedge miss Which of these was a factor in the U.S.'s ability to borrow in foreign markets? China's recent economic surge and resulting savings glut The stability of the Eurozone Foreign investment in U.S. domestic industries Fluctuating value of the dollar Destabilizing speculation: Goes against market forces by moderating changes in exchange rates Goes against market forces by causing rapid fluctuation in currency markets Goes with market forces by reinforcing fluctuations in exchange rates Goes with market forces regardless of market fluctuation or stability Which of these is not a type of transaction in the Forex market? forward transaction bid rate currency swap spot transactio

Explanation / Answer

1. When currency depreciates the investor confidence in the economy goes down. This decline in value negatively affects an economy by creating instabilities in exchange rates, meaning that one unit of the currency no longer buys as much as it used to in another. To simplify the matter, we can say that crises develop as an interaction between investor expectations and what those expectations cause to happen. Source: Investopedia

2. The difference between bid and ask price of an asset is called Spread.

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