Multiple Choice
Suppose the government of New Country fixes the exchange rate of its currency, the Newo, in terms of the U.S. dollar. Initially the exchange rate is set at $0.50 per Newo. In a crisis, the government changes the exchange rate to $0.25 per Newo. This is an example of a(n) :
A) appreciation.
B) depreciation.
C) devaluation.
D) revaluation.
Correct Answer:
Verified
Correct Answer:
Verified
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