A Factor That Helps to Determine the Demand for the Dollar

question 458

Multiple Choice

A factor that helps to determine the demand for the dollar in the foreign exchange market is

• A) the expected future exchange rate.
• B) the expected future interest rate.
• C) the amount of U.S. imports.
• D) the supply of U.S. dollars.

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Definitions:

Compensating Variation

A measure of the amount of money needed to compensate an individual for a change in welfare or utility, keeping utility constant.

Pairs

Two things that are designed to be used together or are similar in nature, often considered as a unit.

Demand Function

A mathematical equation that describes the quantity of a good or service demanded at various prices.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.