Ceteris paribus,with a fixed exchange rate,if people in Argentina decide to buy more Russian oil,this causes a market ________ of Russian currency and creates a balance-of-payments ________ for Russia.

Question

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If people in Argentina buy more Russian oil, they will need to pay for it in Russian currency. This increases the demand for Russian rubles and causes a shortage of rubles in the market. This shortage results in an increase in the value of Russian currency through an increase in its exchange rate. Since Russia is receiving more money for its exports (oil), this results in a surplus in their balance-of-payments.

Ceteris Paribus,with a Fixed Exchange Rate,if People in Argentina Decide