Under a Flexible Exchange Rate System, the Rate That Equates

question 54

Multiple Choice

Under a flexible exchange rate system, the rate that equates demand and supply in the exchange rate market also equates the

• A) value of the nation's merchandise exports with the value of its merchandise imports.
• B) value of the nation's purchases of goods, services, and assets from foreigners with the value of the nation's sales of these items to foreigners.
• C) debit and credit items on current account transactions.
• D) debit and credit items on capital account transactions.