The Law of Demand for Dollars in the Foreign Exchange

question 40

Multiple Choice

The law of demand for dollars in the foreign exchange market means that the

• A) lower the exchange rate, the greater the quantity of dollars demanded.
• B) higher the exchange rate, the smaller the quantity of dollars demanded.
• C) lower the exchange rate, the smaller the quantity of U.S. exports demanded.
• D) Both answers A and B are correct.

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