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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Definitions:

Legal Fees

Costs associated with legal services provided to a company, including litigation, contracts review, or regulatory compliance advice.

Promotional Fees

Charges or fees associated with marketing activities, including advertising, public relations, and promotional events, aimed at enhancing sales and brand visibility.

Fair Market Value

The cost at which a financial asset is exchanged between a ready buyer and a ready seller, where neither party is obligated to proceed with the transaction and both parties are well-informed of all pertinent information.