Under a System of Freely flExible (flOating) Exchange Rates, a U.S

question 273

Multiple Choice

Under a system of freely flexible (floating) exchange rates, a U.S. trade deficit with Mexico will tend to cause

• A) the U.S. government to ration pesos to U.S. importers.
• B) a flow of gold from the United States to Mexico.
• C) an increase in the peso price of dollars.
• D) an increase in the dollar price of pesos.

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