In a Freely Floating Exchange Rate System,if the Capital Account

question 15

Multiple Choice

In a freely floating exchange rate system,if the capital account surplus for the U.S.rises,what will most likely happen to the real value of the dollar?

• A) It will decline.
• B) It will rise.
• C) There is no impact on the dollar.
• D) The IMF will step in to adjust rising exchange rates.

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Definitions:

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Passive Voice

A grammatical construction in which the subject of a sentence is the recipient of an action rather than the performer of the action.

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