Question 1
Under a system of floating exchange rates, an excess supply for a particular currency will lead to a(n)
◦ depreciation of that currency.
◦ long-term shortage of that currency.
◦ appreciation of that currency.
◦ long-term surplus of that currency.
Question 2
Under a system of floating exchange rates, a surplus in a currency will lead to a(n)
◦ depreciation of that currency.
◦ appreciation of that currency.
◦ long-term surplus of that currency.
◦ long-term shortage of that currency.