As the dollar exchange rate, e, decreases, the quantity of dollars supplied in the foreign exchange market ________, and the quantity of dollars demanded in the foreign exchange market ________.
A)increases; increases
B)increases; decreases
C)decreases; increases
D)decreases; decreases

Question

Quizplus · Accepted Answer

Foreign exchange markets operate on the same principals as other markets: as the price of a dollar (the dollar exchange rate)falls, suppliers decrease the number of dollars they bring to market and demanders increase the number of dollars they want to buy.

As the Dollar Exchange Rate, E, Decreases, the Quantity of Dollars