Under the System of Freely Floating Exchange Rates, If a Country's

Multiple Choice

Under the system of freely floating exchange rates, if a country's imports rise to exceed its exports:

A) the country will experience an outflow of gold.
B) the country will have to negotiate a loan from the International Monetary Fund.
C) the country's currency will depreciate enough in relation to other currencies to restore its payments balance.
D) a contractionary monetary policy will be required.