________ refers to funds available for immediate payment

Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?

A) The demand for bottled water decreases. B) The demand for bottled water increases. C) The quantity of bottled water demanded increases. D) The quantity of bottled water demanded decreases. E) None of the above answers is correct because it is the supply that immediately changes, not the demand.

A currency is overvalued if its exchange rate vis-à-vis a foreign currency is:

A) at the equilibrium exchange rate. B) not pegged. C) below the equilibrium exchange rate. D) above the equilibrium exchange rate.