With everything else the same, in the foreign exchange market which of the following increases the supply of Australian dollars?
I. A fall in the Australian interest rate
II. A fall in interest rates in foreign countries
III. A rise in the expected future exchange rate

Question

Quizplus · Accepted Answer

A fall in the Australian interest rate makes Australian assets less attractive, leading investors to sell Australian dollars, thus increasing the supply.

With Everything Else the Same, in the Foreign Exchange Market