When the exchange rate is allowed to adjust to market forces, all of the following are true except one.Which is the exception?
A) The foreign exchange market clears continually.
B) The quantities of foreign exchange demanded and supplied are equal.
C) The exchange rate will only change if the central bank alters the exchange rate.
D) The exchange rate will remain constant until a change occurs in one of the factors that affect supply or demand.
E) The forces of demand and supply determine the exchange rate.
Correct Answer:
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Q164: Exhibit 20-7 Q165: If the U.S.dollar depreciates, it becomes cheaper Q166: Prior to World War II, the international Q167: Under fixed exchange rates, a central bank Q168: If interest rates fall in country A, Q170: All of the following are true concerning Q171: When faced with a continual excess demand Q172: A floating exchange rate Q173: Which of the following statements is not Q174: Under a fixed exchange rate system, an
A)adjusts
A)is determined by the
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