Under a System of Floating Exchange Rates, If the Quantity

question 46

Multiple Choice

Under a system of floating exchange rates, if the quantity of dollars demanded exceeds the quantity of dollars supplied:

• A) the price of a dollar will not change
• B) the price of a dollar will increase
• C) the price of a dollar will decrease
• D) the government will always increase the supply of money to eliminate this excess demand

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Definitions:

Globalization

The increasing interconnectedness and interdependence of the world's markets and businesses, facilitated by advancements in transportation, communication, and technology.

Tax Bases

The total amount of assets or income that can be taxed by a government, forming the foundation for calculating tax liabilities.

Services

Intangible products or actions that provide value to consumers, differing from goods which are physical items.

Federal Government

The national government of a federal country, which shares sovereignty with constituent states or provinces, responsible for governing national matters.