When the Price of Foreign Currency (I

question 38

Multiple Choice

When the price of foreign currency (i.e., the exchange rate) is above the equilibrium level,

• A) an excess supply of that currency exists in the foreign exchange market.
• B) an excess demand for that currency exists in the foreign exchange market.
• C) the supply of foreign exchange shifts outward to the right.
• D) the supply of foreign exchange shifts backward to the left.

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Definitions:

Increases

Situations in which there is a rise in number, volume, significance, or magnitude of a particular variable or condition.

Polarization

In social psychology, the phenomenon wherein a group's prevailing attitudes or beliefs become more extreme over time; in physics, it refers to the orientation of waves such that the oscillations occur in particular directions.

Group Discussion

A form of collaborative verbal interaction where multiple individuals address a topic or problem to reach a conclusion or share insights.

Risky Shift

The tendency for a group decision to be riskier than the average decision made by the individual group members.