In a freely floating exchange rate system, if the capital account surplus for the U.S. rises, what will most likely happen to the real value of the dollar?

Select one:

a. The IMF will step in to adjust rising exchange rates.

b. The value of other trading currencies will rise.

c. It will decline.

d. There is no impact on the dollar.

e. It will rise.

High inflation undermines the role of money as a medium of exchange by acting as

Select one:

a. a tax on cash holdings

b. a reducing agent of price

c. a complementary to the government

d. a non-impacting factor

e. an improvement to purchasing power