Currency values under a flexible exchange rate system are determined by the forces of supply and demand. Other things equal, if U.S. incomes, U.S. inflation, or foreign interest rates increase
A) there will be a decreased demand for foreign goods, services and securities, an increase in the supply of dollars, and the dollar will appreciate.
B) there will be an increased demand for foreign goods, services and securities, an increase in the supply of dollars, and the dollar will appreciate.
C) there will be an increased demand for foreign goods, services and securities, an increase in the supply of dollars, and the dollar will depreciate.
D) there will be a decreased demand for foreign goods, services and securities, an increase in the supply of dollars, and the dollar will depreciate.
Correct Answer:
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Q15: Which of the following statements best describes
Q16: Which of the following statements best describes
Q17: Which of the following situations is a
Q18: An exchange rate system where currency values
Q19: Ceteris paribus, the quantity demanded is what
Q21: Exchange rates are affected by
A)market forces.
B)central banks.
C)commercial
Q22: A system where currency values fluctuate with
Q23: Under the flexible exchange rate system, markets
Q24: Derivatives can be used
A)to hedge exchange rate
Q25: The dollar acts as a store of
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