Consider the market for euros. Suppose the exchange rate is_________ its equilibrium. This means that the quantity of euros_________ is greater than the quantity of euros _________and the exchange rate will_________ .
A) below; demanded; supplied; fall
B) above; demanded; supplied; fall
C) below; supplied; demanded; rise
D) above; supplied; demanded; fall

Question

Quizplus · Accepted Answer

When the exchange rate is above its equilibrium, the quantity of euros supplied is greater than the quantity demanded, leading to a surplus, causing the exchange rate to fall.

Consider the Market for Euros