Under a Flexible Exchange Rate System,if the Quantity Supplied of Dollars

question 14

Multiple Choice

Under a flexible exchange rate system,if the quantity supplied of dollars is less than the quantity demanded of dollars,there is a:

• A)balance of payments deficit and the dollar would depreciate.
• B)balance of payments surplus and the dollar would depreciate.
• C)balance of payments deficit and the dollar would appreciate.
• D)balance of payments surplus and the dollar would appreciate.

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Definitions:

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