In a System of Flexible Exchange Rates,a Reduction in the Money

question 45

Multiple Choice

In a system of flexible exchange rates,a reduction in the money supply will cause

• A)a rise in the value of the dollar relative to foreign currencies.
• B)a fall in the value of the dollar relative to foreign currencies.
• C)no change in the value of the dollar relative to foreign currencies.
• D)a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.

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Definitions:

$600 Billion

An indicative monetary figure which could refer to various financial contexts, such as the value of a particular market, a government budget, or a company's revenue.

Economic Espionage

The act of obtaining trade secrets from business competitors through illegal means for commercial advantage.

Foreign Governments

The governing bodies of countries other than one's own, which operate under different legal and political systems.

Prescribed Penalty

A specific punishment or consequence that is mandated for a particular violation or offense.