If There Is Currently a Surplus of Dollars, Which of the Following

question 41

Multiple Choice

If there is currently a surplus of dollars, which of the following would you expect to see in the foreign exchange market?

• A)The dollar will appreciate.
• B)The dollar will depreciate.
• C)There will be a decrease in the demand for dollars.
• D)There will be a decrease in the supply of dollars.
• E)The will be an increase in the quantity of dollars supplied.

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Definitions:

Fiscal Expenditure

Government spending, including spending on goods and services, welfare, and public works, financed through taxation or borrowing.

Taxes

Taxes are compulsory financial charges or levies imposed by a government on individuals or entities to finance government spending and various public expenditures.

Aggregate Demand-Aggregate Supply Model

A macroeconomic model that explains price level and output through the relationship between aggregate demand and aggregate supply.

Long-Run Equilibrium

Refers to a state in an economy where all factors of production are efficiently utilized, and supply equals demand, leading to stable prices and full employment over time.