MCQOPTIONS
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| 1. |
When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ? |
| A. | an excess demand for that currency exists in the foreign exchange market |
| B. | an excess supply of the currency exists in the foreign exchange market |
| C. | the demand for foreign exchange shifts outward to the right |
| D. | the demand for foreign exchange shifts backward to the left |
| Answer» B. an excess supply of the currency exists in the foreign exchange market | |