Refer to the graph below, which shows a change in the demand for pounds from D to D'. Under a system of fixed exchange rates, the:
A. Price of a pound will increase to $3
B. Price of a dollar will increase to 3 pounds
C. Shortage equal to ab would be met using international monetary reserves
D. Payment deficit will cause changes in price and income levels, which reestablishes the original exchange rate
C. Shortage equal to ab would be met using international monetary reserves
You might also like to view...
Suppose that Jinelle, an engineer, has to choose between two jobs. Which of the following statements is true?
A) When deciding between both jobs, she should consider both wage and non-wage attributes of each job. B) While deciding between jobs, she should focus only on the costs of each job and ignore the benefits. C) While deciding between jobs, she should only focus on the benefits from each job and ignore the costs. D) While deciding between jobs, she should consider the wage attributes and ignore the non-wage attributes of each job.
If national saving decreases,
A) the sum of domestic investment and foreign investment must increase. B) the sum of domestic investment and net exports must increase. C) the sum of domestic investment and foreign investment must decrease. D) foreign investment must increase to cover the loss.