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Figure 10-2 -Refer to Figure 10-2. the Supply of Dollars Curve Slopes

Question 53

Multiple Choice

Figure 10-2
-Refer to Figure 10-2. The supply of dollars curve slopes upwards because

A) a higher exchange rate tends to make foreign goods and services more expensive for U.S. buyers, thereby raising the price of foreign currency in the foreign exchange market.
B) a higher exchange rate tends to make foreign goods and services cheaper to U.S. buyers, thereby generating a higher quantity of dollars in the foreign exchange market.
C) a lower exchange rate tends to decrease U.S. exports, thereby generating a lower quantity of dollars in the foreign exchange market.
D) a lower exchange rate tends to increase U.S. imports, thereby raising the price of foreign currency in the foreign exchange market.

Correct Answer: