Q. Given a system of floating Exchange rates, falling income in the United States would trigger:
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(A)
An increase in the demand for imports and an increase in the demand for foreign currency
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(B)
An increase in the demand for imports and a decrease in the demand for foreign currency
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(C)
A decrease in the demand for imports and an increase in the demand for foreign currency
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(D)
A decrease in the demand for imports and a decrease in the demand for foreign currency
✅ Correct Answer: (D)
A decrease in the demand for imports and a decrease in the demand for foreign currency