In the foreign currency market,the supply of a foreign currency is assumed to be ________ because the central bank determines the supply of money.

Question

Quizplus · Accepted Answer

The supply of a foreign currency is assumed to be vertical because the central bank determines the supply of money. The supply curve is fixed and does not change with changes in price, as the central bank can practically print an infinite amount of money.

In the Foreign Currency Market,the Supply of a Foreign Currency