Suppose,in foreign exchange markets,the quantities supplied of U.S.dollars exceed the quantities demanded of U.S.dollars.Under a flexible exchange rate system
A) the exchange rate (price in dollars of foreign currency) would rise.
B) the exchange rate (price in dollars of foreign currency) would fall.
C)the exchange rate (price in dollars of foreign currency) would remain unchanged because the foreign demand for dollars would shift to the right.
D)the supply for dollars would shift to the left.
E)gold would flow into the United States, causing the price level to rise.

Question

Quizplus · Accepted Answer

When the quantity supplied of U.S. dollars exceeds the quantity demanded, the value of the dollar will fall, making it cheaper to buy foreign currency.

Suppose,in Foreign Exchange Markets,the Quantities Supplied of U