If Currency Traders Expect the Value of the Dollar to Rise

question 9

Multiple Choice

If currency traders expect the value of the dollar to rise, what effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

• A)Demand for dollars will increase and supply of dollars will decrease.
• B)Demand for dollars will increase and supply of dollars will increase.
• C)Demand for dollars will decrease and supply of dollars will increase.
• D)Demand for dollars will decrease and supply of dollars will decrease.

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Definitions:

Anticipatory Socialization

The process of learning and preparing for future roles and social expectations before one actually occupies the role.

Social Position

A person's place or status within a social hierarchy, which can be determined by factors such as occupation, income, education, and social network.

Recognized

Acknowledged or identified by a particular standard or authority.

Thomas Theorem

A theory stating that if people define situations as real, they are real in their consequences.