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 deficit.
• D)​make it less expensive for foreigners to buy the nation's goods.