2184EconomicsMedium
When the price of foreign currency (i.e the exchange rate) is below the equilibrium level?
Athe demand for foreign exchange shifts backward to the left
Ban excess supply of the currency exists in the foreign exchange market
Can excess demand for that currency exists in the foreign exchange market
Dthe demand for foreign exchange shifts outward to the right
Correct answer
C. an excess demand for that currency exists in the foreign exchange market
Explanation
The correct answer is an excess demand for that currency exists in the foreign exchange market.