What is the shape for the demand curve for foreign exchange?

Question

Quizplus · Accepted Answer

The demand curve for foreign exchange is typically downward sloping, which means that as the exchange rate (price of foreign currency) decreases, the quantity demanded of foreign currency increases. This is because a lower exchange rate makes foreign goods cheaper for domestic consumers, and also makes it cheaper for domestic firms to purchase foreign inputs or invest in foreign assets. Alternatively, as the exchange rate increases, the quantity demanded of foreign currency decreases due to higher costs for foreign goods and inputs.

What Is the Shape for the Demand Curve for Foreign