If the supply of dollars in the market for foreign-currency exchange shifts left, then the exchange rate

If the supply of dollars in the market for foreign-currency exchange shifts left, then the exchange rate

rises and the quantity of dollars exchanged falls.
rises and the quantity of dollars exchanged does not change.
rises and the quantity of dollars exchanged rises.
falls and the quantity of dollars exchanged does not change.

If a country has a trade deficit

It has positive net exports and positive net capital outflow.
It has positive net exports and negative net capital outflow.
It has negative net exports and positive net capital outflow.
It has negative net exports and negative net capital outflow.

If a country has a trade surplus

It has positive net exports and positive net capital outflow.
It has positive net exports and negative net capital outflow.
It has negative net exports and positive net capital outflow.
It has negative net exports and negative net capital outflow.

The real exchange rate measures the

price of domestic currency relative to foreign currency.
price of domestic goods relative to the price of foreign goods.
rate of domestic and foreign interest.
none of the above is correct.

Solutions

Expert Solution

Ans) the correct option is a) rises and the quantity of dollars exchanged falls.

Ans) the correct option is d) It has negative net exports and negative net capital outflow.

Ans) the correct option is a) It has positive net exports and positive net capital outflow.

Ans) the correct option is b) price of domestic goods relative to the price of foreign goods.

Rahul Sunny answered 2 years ago

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