When the foreign exchange value of the dollar is below its equilibrium rate, the U.S. dollar tends to
A) be revalued.
B) be devalued.
C) depreciate.
D) appreciate.
E) be deflated.

Question

Quizplus · Accepted Answer

When the foreign exchange value of the dollar is below its equilibrium rate, it means that the dollar is weaker compared to other currencies. This leads to an increase in demand for the dollar, causing its value to appreciate or increase. Therefore, the correct answer is option D, to appreciate.

When the Foreign Exchange Value of the Dollar Is Below