Under a System of Floating Exchange Rates, an Excess Demand

question 129

Multiple Choice

Under a system of floating exchange rates, an excess demand for a particular currency will lead to a(n)

• A) depreciation of that currency.
• B) long-term shortage of that currency.
• C) appreciation of that currency.
• D) long-term surplus of that currency.

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Definitions:

Impulse Control

The ability to resist or delay an impulse, drive, or temptation to act and is related to self-regulation.

Anxious Cluster

A group of personality disorders characterized by high levels of anxiety and fearfulness; includes avoidant, dependent, and obsessive-compulsive personality disorders.

Obsessive-Compulsive

Referring to a disorder characterized by unwanted, persistent thoughts (obsessions) and repetitive behaviors (compulsions) that an individual feels the urge to perform.

Avoidant

Characterized by a pattern of social inhibition, feelings of inadequacy, and a hypersensitivity to negative evaluation.