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)improve its terms of trade.

Question

Quizplus · Accepted Answer

An increase in the international value of a nation's currency makes its imports cheaper and exports more expensive to foreigners, thus improving its terms of trade.

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