If a Country's Budget Deficit Increases,then in the Market for Foreign-Currency

question 107

Multiple Choice

If a country's budget deficit increases,then in the market for foreign-currency exchange,

• A)the supply of its currency shifts right,so the exchange rate falls.
• B)the demand for its currency shifts right,so the exchange rate rises.
• C)the supply of its currency shifts left,so the exchange rate rises.
• D)the demand for its currency shifts left.so the exchange rate falls.

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Definitions:

Need for Cognition

The motivation to engage and enjoy thinking deeply about information and problems.

Strong Arguments

Persuasive arguments that are logical, well-supported, and convincing.

Weak Arguments

Arguments that lack solid reasoning, evidence, or both, often failing to convincingly support the stated claim.

Tolerance for Ambiguity

The ability to remain comfortable and react constructively in situations that are unclear, complex, or not immediately understandable.