Under a flexible exchange rate system, if the quantity supplied of dollars is less than the quantity demanded of dollars, there is a:
A) balance of payments deficit and the dollar would depreciate.
B) balance of payments surplus and the dollar would depreciate.
C) balance of payments deficit and the dollar would appreciate.
D) balance of payments surplus and the dollar would appreciate.
D
You might also like to view...
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
For a given real exchange rate, a nominal appreciation of the domestic currency will result from
A) a decline in the terms of trade. B) an increase in the price of the foreign good. C) an increase in the price of the domestic good. D) an increase in the domestic rate of inflation.
Other things the same, if the U.S. interest rate rises, what happens to the net capital outflow of other countries?
The ________ the sale of an additional unit of a product is a marginal benefit to the firm
A) revenue received from B) extra cost of C) total value of D) sales tax on