When the real quantity of money supplied equals the real quantity of money demanded, there is said to be

Assume that the fixed exchange rate system of 100 pesos = 1 dollar is above the equilibrium exchange rate of 90 pesos= 1 dollar in a flexible exchange rate system. Then the dollar would be

a. undervalued and the peso would be overvalued. b. overvalued and the peso would be undervalued. c. revalued. d. depreciated and the peso would be appreciated.

In the presence of Regulation Q, when interest rates would rise, _____

a. the transaction demand for money in the economy would increase b. people would invest in the bond markets c. the economy would grow faster d. people would withdraw money from banks seeking higher interest rates elsewhere e. the U.S. dollar would depreciate