If,at the current exchange rate between the dollar and the South African rand of 6.92 rand per dollar,the dollar is "undervalued," how do you expect demand and supply in the foreign exchange markets to respond?
A)The demand for the dollar will rise,while the supply of the rand will fall.
B)The demand for the dollar will fall,while the supply of the rand will rise.
C)The demand for the dollar will rise,while the supply of the rand will rise.
D)The supply of the dollar will fall,while the demand for the rand will rise.

Question

Quizplus · Accepted Answer

If the dollar is undervalued, it is cheaper than it should be, leading to increased demand for the dollar and increased supply of the rand as people exchange more rand for dollars.

If,at the Current Exchange Rate Between the Dollar and the South