There Is Demand for and Supply of Dollars and a Demand

question 65

Multiple Choice

There is demand for and supply of dollars and a demand for and supply of pesos.Under a flexible exchange rate system,if income growth in the United States is greater than income growth in Mexico,then

• A) the demand for dollars will shift to the right and the demand for pesos will shift to the left.
• B) the demand for pesos will shift to the right and the supply of dollars will shift to the left.
• C) the demand for pesos will shift to the left and the supply of pesos will shift to the right.
• D) the supply of pesos will shift to the right and the supply of dollars will shift to the right.
• E) none of the above

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