If at a given exchange rate, the supply of dollars is less than the demand for dollars ________.

Question

Quizplus · Accepted Answer

If the supply of dollars is less than the demand for dollars, then there will be more people trying to buy dollars than there are dollars available. This will create upward pressure on the value of the dollar, as people will be willing to pay more for fewer dollars. In order to reach equilibrium, the value of the dollar will need to rise until the supply of dollars matches the demand for dollars. Therefore, the correct answer is D, there will be upward pressure on the value of the dollar.

If at a Given Exchange Rate, the Supply of Dollars