In the Foreign Exchange Market, the Supply Curve for Dollars

question 175

Multiple Choice

In the foreign exchange market, the supply curve for dollars slopes upwards because

• A) as the exchange rate rises, imports become more expensive, and more dollars are supplied to pay for the imports.
• B) as the exchange rate rises, imports become cheaper, and more dollars are supplied to pay for the increase in the quantity of imports.
• C) as the exchange rate rises, more dollars are supplied since the profit from selling dollars falls.
• D) supply curves always slope upwards.