Under a system of fixed exchange rates, the purpose of currency revaluation is to cause the exchange value of a currency to ______, thus counteracting a balance-of-payments ______.
A) depreciate, deficit
B) depreciate, surplus
C) appreciate, deficit
D) appreciate, surplus

Question

Quizplus · Accepted Answer

Currency revaluation under a fixed exchange rate system is intended to increase the value of the currency (appreciate) to address a balance-of-payments surplus, where the country's currency is in high demand.

Under a System of Fixed Exchange Rates, the Purpose of Currency