Multiple Choice
There is demand for and supply of dollars and a demand for and supply of pesos.Under a flexible exchange rate system,if income growth in the United States is greater than income growth in Mexico,then
A) the demand for dollars will shift to the right and the demand for pesos will shift to the left.
B) the demand for pesos will shift to the right and the supply of dollars will shift to the left.
C) the demand for pesos will shift to the left and the supply of pesos will shift to the right.
D) the supply of pesos will shift to the right and the supply of dollars will shift to the right.
E) none of the above
Correct Answer:

Verified
Correct Answer:
Verified
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