In the Monetary Approach to the Balance of Payments and the Exchange

Multiple Choice

In the monetary approach to the balance of payments and the exchange rate, if there is an excess demand for money, the result is a balance-of-payments __________ in a fixed exchange rate situation and __________ of the country's currency in a flexible exchange Rate situation.

A) surplus; an appreciation
B) surplus; a depreciation
C) deficit; an appreciation
D) deficit; a depreciation