Category: Exchange-Rate Determination

Given a system of floating exchange rates rising income in the United States would trigger a (an) ?

A. increasing in the demand for imports and an increasing in the demand for foreign currency
B. increase in the demand for imports and decrease in the demand for foreign currency
C. decrease in the demand for imports and an increase in the demand for foreign currency
D. decrease in the demand for imports and a decrease in the demand for foreign currency

Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?

A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar