Holding all else constant, if the U.S. government restricts capital outflows, then the equilibrium value of the U.S. dollar will:
A)appreciate.
B)depreciate.
C)remain fixed.
D)be determined by the Federal Reserve.

Question

Quizplus · Accepted Answer

A restriction of the amount of capital outflow from the U.S. is the same as a reduction in the supply of dollars in the foreign exchange market. This reduction in supply of dollars will make the U.S. dollar appreciate.

Holding All Else Constant, If the U