If the U.S.A. imports more than it exports, then: O a. The supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus. O b.One can infer that the U.S. dollar would be under pressure to depreciate against other currencies. O. Both a. and b. are correct. O d. None of the above.

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter6: Government Influence On Exchange Rates
Section: Chapter Questions
Problem 1ST
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If the U.S.A. imports more than it exports, then:
O a. The supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.
Ob. One can infer that the U.S. dollar would be under pressure to depreciate against other currencies.
O. Both a. and b. are correct.
O d. None of the above.
Transcribed Image Text:If the U.S.A. imports more than it exports, then: O a. The supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus. Ob. One can infer that the U.S. dollar would be under pressure to depreciate against other currencies. O. Both a. and b. are correct. O d. None of the above.
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