An increase in the supply of U.S. dollars in the foreign exchange market would cause the dollar to appreciate with respect to other currencies.

Question

Quizplus · Accepted Answer

An increase in the supply of U.S. dollars in the foreign exchange market would cause the value of the dollar to decrease in relation to other currencies, not appreciate. This is because an increase in supply leads to a decrease in demand, which can put downward pressure on the dollar's value.

An Increase in the Supply of U