Under a system of flexible exchange rates, an increase in the international value of a nation's currency will
A) cause an international surplus of its currency.
B) contribute to disequilibrium in its balance of payments.
C) cause gold to flow into that country.
D) cause its imports to rise.

Question

Quizplus · Accepted Answer

An increase in the international value of a nation's currency makes foreign goods cheaper, leading to an increase in imports.

Under a System of Flexible Exchange Rates, an Increase in the International