Suppose an event occurs that causes people to gain faith in the ability of Europeans to pay their euro-denominated debt. Suppose that before this happens the exchange rate between the euro and the dollar is .75 euros/dollar. The resulting exchange rate would likely
A. cause the exchange rate to have to be expressed in dollars per euro (because the other way would no longer make sense).
B. rise to (perhaps) .9 euros/dollar.
C. fall to (perhaps) .6 euros/dollar.
D. remain unchanged.
Answer: C
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