Which of the following statements is (are) true?
A)Under flexible exchange rates, the value of the dollar is determined by supply and demand.
B)The demand for dollars is determined by foreign demand for U.S. goods, services, and securities.
C)Ceteris paribus, the quantity supplied of dollars is directly related to the exchange rate.
D)All of the above are true.

Question

Quizplus · Accepted Answer

All of the statements are true. Under flexible exchange rates, the value of the dollar is determined by supply and demand, with the demand for dollars being determined by foreign demand for U.S. goods, services, and securities. Ceteris paribus (all else equal), the quantity supplied of dollars is directly related to the exchange rate.

Which of the Following Statements Is (Are) True