Under Independently Floating Exchange Rate Systems, When Aggregate Demand for a Currency

question 79

Multiple Choice

Under independently floating exchange rate systems, when aggregate demand for a currency exceeds aggregate supply for a particular country:

• A) The currency should strengthen and have more foreign currency units for each domestic unit
• B) The currency should strengthen and have fewer foreign currency units for each domestic unit
• C) The currency should weaken and have fewer foreign currency units for each domestic unit
• D) The currency should weaken and have more foreign currency units for each domestic unit

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Definitions:

Value

The importance, worth, or usefulness of something, often in terms of monetary worth.

Price

The amount of money required to purchase a good or service.

Price Lining

Grouping product prices into ranges, such as low-, medium-, and high-priced items.

Pricing Tactic

Strategic approaches used to set prices for products or services to achieve business objectives.