If the United States Has a Current Account Deficit with England

question 58

Multiple Choice

If the United States has a current account deficit with England of $1 million,and the Bank of England sells $1 million worth of pounds in the foreign exchange market,then England ________ $1 million of international reserves and its monetary base ________ by $1 million.

• A)gains;rises
• B)gains;falls
• C)loses;rises
• D)loses;falls

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Definitions:

Richard Nixon

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