If the Current Exchange Value of the Dollar Is $1

question 36

Multiple Choice

If the current exchange value of the dollar is $1.25 per euro, then

• A) European Investor #1 has less incentive to invest in the United States and thus demands fewer dollars.
• B) European Investor #2 has less incentive to invest in the United States and thus demands fewer dollars.
• C) European Investor #3 has less incentive to invest in the United States and thus demands fewer dollars.
• D) all three European investors have less incentive to invest in the United States and thus demands fewer dollars.