If Morocco experienced capital flight,which statement would best explain the effects?
A) The supply of Moroccan dirham curve would shift left,which would make the real exchange rate of the Moroccan dirham appreciate.
B) The supply of Moroccan dirham curve would shift left,which would make the real exchange rate of the Moroccan dirham depreciate.
C) The supply of Moroccan dirham curve would shift right,which would make the real exchange rate of the Moroccan dirham appreciate.
D) The supply of Moroccan dirham curve would shift right,which would make the real exchange rate of the Moroccan dirham depreciate.

Question

Quizplus · Accepted Answer

Capital flight would increase the supply of the Moroccan dirham in the foreign exchange market as investors sell off the currency, causing the real exchange rate to depreciate.

If Morocco Experienced Capital Flight,which Statement Would Best Explain the Effects