In a system of flexible exchange rates,a reduction in the money supply will cause
A) a rise in the value of the dollar relative to foreign currencies.
B) a fall in the value of the dollar relative to foreign currencies.
C) no change in the value of the dollar relative to foreign currencies.
D) a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.
Correct Answer:
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A)decreases foreign borrowing.
B)will
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