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Q. |
If the exchange rate is above the equilibrium level then in a floating exchange rate system: |
A. | There is excess demand and the exchange rate should fall |
B. | There is excess supply and the exchange rate should fall |
C. | There is excess demand and the exchange rate should rise |
D. | There is excess supply and the exchange rate should rise |
Answer» B. There is excess supply and the exchange rate should fall |
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