Answering Exams

When the price of foreign currency (the exchange rate) is above the equilibrium level ?

When the price of foreign currency (the exchange rate) is above the equilibrium level ?

A. an excess supply of that currency exists in the foreign exchange market (Correct)
B. an excess demand for that currency exists in the foreign exchange market
C. the supply of foreign exchange shifts outward to the right
D. the supply of foreign exchange shifts backward to the left

 

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