MGMT 4B Study Guide - Quiz Guide: Speculation, Brazilian Real, Capital Account
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Suppose that a new study comes out showing that brazilian coffee has a higher cancer risk than other countries around the world. A central bank intervenes within foreign exchange markets in order to maintain a fixed peg. Selling currency _____ it and purchasing additional money _____ it. The ____ is the largest component within the current account. If the european central bank chooses to match an interest rate hike by the us, will the economy enter a bearish or bullish state? (choose the best answer. ) Bearish state because higher interest rates depress the investment component of. Gdp growth, causing a decline in economic expansion. Competitive devaluation is used to stimulate net exports and, thus, gdp growth and the employment rate. Which of the following causes a change in the exchange rate: differing gdp growth rates, differing recessionary rates, change in relative interest rates, trade balances, trade agreement alterations, currency speculation, political stability, geopolitical risk, and exogenous shocks.
