The equilibrium exchange rate is 70 yen per Australian dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 billion a day. If the exchange rate is now 80 yen per Australian dollar, then
A) there is a surplus of dollars and the exchange rate rises.
B) there is no change.
C) there is a shortage of dollars and the exchange rate falls.
D) there is a shortage of dollars and the exchange rate rises.
E) there is a surplus of dollars and the exchange rate falls.
Correct Answer:
Verified
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A) very volatile because
A) the
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