Under a System of Flexible Exchange Rates, an Increase in Demand

question 140

Multiple Choice

Under a system of flexible exchange rates, an increase in demand for a nation's currency in the foreign exchange market will

• A) cause the nation's currency to appreciate.
• B) make it more expensive for the nation to import goods.
• C) cause the nation's balance on current account to shift toward a surplus.
• D) make it less expensive for foreigners to buy the nation's goods.

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Definitions:

P-Value

The probability of observing results at least as extreme as those in the data, assuming the null hypothesis is true, used as a method to test hypotheses.

Large-Sample Z

A statistical test used for hypothesis testing or constructing confidence intervals when the sample size is large, typically using the Z-distribution.

Major Defects

Significant imperfections or flaws in a product, system, or process that adversely affect its performance, safety, or intended function.

Margin of Error

The amount of error allowed in the results of a survey, often expressed as a percentage.