Given an initial equilibrium in the money market and foreign exchange market, suppose the Federal Reserve decreases the money supply of the United States. Under a floating exchange rate system, the dollar would: O a. Depreciate in value relative to other currencies Ob.Appreciate in value relative to other currencies OC. Be officially revalued by the government d. Be officially devalued by the government

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Given an initial equilibrium in the money market and foreign exchange market, suppose the Federal
Reserve decreases the money supply of the United States. Under a floating exchange rate system, the
dollar would:
a. Depreciate in value relative to other currencies
O b. Appreciate in value relative to other currencies
OC. Be officially revalued by the government
Od. Be officially devalued by the government
Transcribed Image Text:Given an initial equilibrium in the money market and foreign exchange market, suppose the Federal Reserve decreases the money supply of the United States. Under a floating exchange rate system, the dollar would: a. Depreciate in value relative to other currencies O b. Appreciate in value relative to other currencies OC. Be officially revalued by the government Od. Be officially devalued by the government
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