Suppose That the Real Exchange Rate Is Such That the Market

Multiple Choice

Suppose that the real exchange rate is such that the market for foreign-currency exchange has a surplus

A) this will lead to an appreciation of the dollar, an increase in U.S.net exports, and so an increase in the quantity of dollars demanded in the foreign exchange market.
B) this will lead to an appreciation of the dollar, a decrease in U.S.net exports, and so a decrease in the quantity of dollars demanded in the foreign exchange market.
C) this will lead to a depreciation of the dollar, an increase in U.S.net exports, and so an increase in the quantity of dollars demanded in the foreign exchange market.
D) this will lead to a depreciation of the dollar, a decrease in U.S.net exports, and so a decrease in the quantity of dollars demanded in the foreign exchange market.