Asked by
McKenna Kelley
on Dec 18, 2024Verified
In contrast to overvalued currencies, undervalued currencies:
A) make foreign debts easier to pay off.
B) boost domestic manufacturing sectors.
C) encourage citizens to buy foreign-produced products.
D) make domestic production less appealing for foreign trade.
Overvalued Currencies
A situation where a currency is trading at a higher value on the foreign exchange market than is warranted by the country’s economic fundamentals.
Undervalued Currencies
Currencies that are traded at a lower exchange rate than their perceived or actual economic value, often due to government intervention or market forces.
Domestic Manufacturing
The production of goods within a country's borders, focusing on local industries and labor forces rather than outsourcing.
- Analyze the effects of currency valuation on domestic industries and international trade.
Verified Answer
AG
Learning Objectives
- Analyze the effects of currency valuation on domestic industries and international trade.