The discovery of a new source of oil will lead to:
A) increased demand for a foreign currency; appreciation of the currency.
B) increased demand for domestic currency; depreciation of the currency.
C) decreased demand for domestic currency; appreciation of the currency.
D) increased demand for domestic currency; appreciation of the currency.

Question

Quizplus · Accepted Answer

The discovery of a new source of oil can lead to increased exports, which increases demand for the domestic currency as foreign buyers need to purchase the domestic currency to pay for the oil. This increased demand can lead to an appreciation of the currency.

The Discovery of a New Source of Oil Will Lead