If,at the Current Exchange Rate Between the Dollar and the South

question 82

Multiple Choice

If,at the current exchange rate between the dollar and the South African rand of 6.92 rand per dollar,the rand is "undervalued," how do you expect demand and supply in the foreign exchange markets to respond?

• A)The demand for the dollar will fall,while the supply of the rand will rise.
• B)The demand for the dollar will rise,while the supply of the rand will fall.
• C)The supply of the dollar will rise,while the demand for the rand will rise.
• D)The supply of the dollar will rise,while the demand for the rand will fall.