You could borrow $2,000 today from Bank A and repay the loan, with interest, by paying Bank A $2,125 one year from today. Or, you could borrow X dollars today from Bank B and repay the loan, with interest, by paying Bank B $2,200 two years from today. In order for the same interest rate to apply to the two loans, X =

Which of the following statements is true?

A) In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. This illustrates the use of Kent cigarettes as fiat money. B) Commodity money has no value apart from its use as money. C) In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. This illustrates the use of Kent cigarettes as commodity money. D) Fiat money must be backed by gold; otherwise it is worthless.

If a dollar is more expensive in terms of a foreign currency than the equilibrium exchange rate, a ____ exists at the current exchange rate that will put ____ pressure on the exchange value of a dollar

a. surplus of dollars; downward b. surplus of dollars; upward c. shortage of dollars; downward d. shortage of dollars; upward