If There Is an Excess Supply of the Domestic Currency

question 41

Multiple Choice

If there is an excess supply of the domestic currency at a fixed exchange rate,

• A) the currency will undergo a devaluation
• B) the currency will appreciate
• C) the country must switch to a floating exchange rate
• D) the central bank must buy up that excess supply or the exchange rate will fall
• E) the central bank must be up that excess supply or the exchange rate will rise

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Definitions:

Graphic Artist

A professional who creates visual content to communicate messages through digital and printed mediums.

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs, measuring the true profitability of an enterprise.

Accounting Profit

The difference between a firm's total revenue and its explicit costs, often reported in the financial statements.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of a company.