A U.S.balance of payments deficit puts ________ pressure on the foreign price of the dollar,which,under a flexible exchange rate system,tends to ________ that deficit.

Question

Quizplus · Accepted Answer

A U.S. balance of payments deficit puts downward pressure on the foreign price of the dollar, which, under a flexible exchange rate system, tends to eliminate that deficit by making U.S. goods cheaper for foreigners and foreign goods more expensive for Americans, thereby reducing the deficit.

A USBalance of Payments Deficit Puts ________ Pressure on the Foreign