In the Monetary Approach to the Balance of Payments and the Exchange

question 5

Multiple Choice

In the monetary approach to the balance of payments and the exchange rate, if there is an excess demand for money, the result is a balance-of-payments __________ in a fixed exchange rate situation and __________ of the country's currency in a flexible exchange Rate situation.

• A) surplus; an appreciation
• B) surplus; a depreciation
• C) deficit; an appreciation
• D) deficit; a depreciation

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Definitions:

Industrialization

The transformation from an agricultural-based economy to one dominated by industry and machine manufacturing, typically seen as a hallmark of economic development.

New York Shipping Companies

Businesses based in New York that specialize in the transportation of goods and cargo across water bodies, significant in the development of global trade.

Frederick Douglass

An African-American social reformer, abolitionist, orator, writer, and statesman who after escaping from slavery in Maryland, became a national leader of the abolitionist movement.

Quakerism

A Christian religious movement formally known as the Religious Society of Friends, known for its pacifist principles, simplicity, and silent worship.