Exchange Rates and the Balance of Payments (id: 24184fa1f)

本题目来源于试卷: Exchange Rates and the Balance of Payments，类别为 IB经济学

[单选题]
Define the term overv q fsmv+szx,99alued currencyq-0wl6qjdwhmain i.j.e v .cj *v0 c3:.

A. A currency whose value increases when quantity demanded exceeds its quantity supplied in the foreign exchange market.
B. A currency whose value decreases when the quantity supplied exceeds the quantity demanded in the foreign exchange market.
C. A currency where the exchange rate exceeds the exchange rate that would exist in a floating exchange rate system.
D. A currency where the exchange rate is set below the exchange rate that would exist in a floating exchange rate system.


参考答案:  C


本题详细解析:

C

$\underset{‾}{\text{Explanation}}$:
C is correct because an overvalued currency's exchange rate is kept artificially high, above the equilibrium in a floating exchange rate regime.

A and B are incorrect because they imply appreciation or depreciation, not overvaluation.

D is wrong because it defines an undervalued currency.

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