When the Supply and Demand of Currencies in the Foreign

question 147

Multiple Choice

When the supply and demand of currencies in the foreign exchange market determines their relative values, this is known as

• A) flexible exchange rates.
• B) depreciation.
• C) fixed exchange rates.
• D) appreciation.

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Definitions:

Elasticity Of Supply

The degree to which the quantity supplied of a good changes in response to a change in its price.

Marginal Value

The additional benefit received by consuming or using one more unit of a good or service.

Markdown

A reduction from the original selling price of goods or services to increase their attractiveness to buyers.

Monopsony Power

The market power held by a single buyer, allowing them to dictate prices to sellers due to a lack of competition.