A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n)________ in the demand of US dollars and a(n)_________in the supply of the Chinese Yuan.
A)Increase;Increase
B)Increase;Decrease
C)Decrease;Increase
D)Decrease;Decrease

Question

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n)________ in the demand of US dollars and a(n)_________in the supply of the Chinese Yuan.
A)​Increase;Increase
B)Increase;Decrease
C)Decrease;Increase
D)​Decrease;Decrease

Quizplus · Accepted Answer

When US depositors withdraw funds from Chinese banks, they convert their Yuan back to US dollars, increasing the demand for US dollars and increasing the supply of the Chinese Yuan in the foreign exchange market.

A Financial Market Panic That Causes US Depositors to Withdraw