A Shortage of Pounds Under a Flexible Exchange Rate System

question 8

Multiple Choice

A shortage of pounds under a flexible exchange rate system results in:

• A)a depreciation of the pound
• B)a depreciation of the dollar
• C)an appreciation of the dollar
• D)no change in the exchange rate

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Definitions:

Account

A record or statement that keeps track of financial transactions or an arrangement with a bank to deposit, withdraw, or manage money.

Invoice

A document issued by a seller to a buyer that lists the products or services provided and specifies the amount owed for them.

Outstanding Balance

The amount of money owed that remains unpaid.

Payment

The act of transferring money or consideration from one party to another in exchange for goods, services, or to fulfill a legal obligation.