Suppose That at the Fixed Exchange Rate Implied by the Gold

question 3

Multiple Choice

Suppose that at the fixed exchange rate implied by the gold standard, the quantity supplied of Podgland's currency exceeded the quantity demanded. This implies that

• A) Podgland has a surplus in its balance of payments.
• B) Podgland has a deficit in its balance of payments.
• C) Podgland has a surplus in its capital account.
• D) The exchange rate will fall to restore equilibrium.

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