On a foreign exchange diagram of the equilibrium exchange rate,there is equilibrium at AUD 0.94 per USD.If the actual exchange rate is AUD/USD0.90 at AUD 0.90,there would be excess _____ the dollar and the AUD dollar would _____ in the return to equilibrium.

Question

Quizplus · Accepted Answer

At an actual exchange rate lower than the equilibrium (AUD/USD 0.90 < AUD 0.94), there is excess demand for the USD, and to return to equilibrium, the AUD would appreciate.

On a Foreign Exchange Diagram of the Equilibrium Exchange Rate,there