Today, the dollar is worth 1.15 euros. Due to changes in economic conditions, people expect that the dollar will be worth 1.20 euros in the next month. This belief
A) increases the demand for dollars.
B) decreases the demand for dollars.
C) increases the demand for euros.
D) increases the value of exports to Europe.
Question 2
A bank's reserves include
A) the cash in its vault plus the value of its depositors' accounts.
B) the cash in its vault plus its deposits held at a Federal Reserve bank.
C) the cash in its vault plus any gold held for the bank at Fort Knox.
D) its common stock holdings, the cash in its vault, and any deposits at a Federal Reserve bank.
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