Question: state whether they are true or false with brief explanation, thank you For a country with deficit in current account, devaluation of domestic currency will

state whether they are true or false with brief explanation, thank you

For a country with deficit in current account, devaluation of domestic currency will help reduce the deficit immediately. In a nation which pegs its currency to the U.S. dollar at fixed exchange rates, it is very likely that the central bank must purchase dollars with its domestic currency when facing large trade surplus. 5

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