Any event that increases the U.S. demand for euros should result in a(n) ____ in the value of the euro with respect to ____, other things being equal.
A) increase; the U.S. dollar
B) increase; nondollar currencies
C) decrease; nondollar currencies
D) decrease; the U.S. dollar

Question

Any event that increases the U.S. demand for euros should result in a(n) ____ in the value of the euro with respect to ____, other things being equal.​
A) ​increase; the U.S. dollar
B) ​increase; nondollar currencies
C) ​decrease; nondollar currencies
D) ​decrease; the U.S. dollar

Quizplus · Accepted Answer

An increase in U.S. demand for euros will increase the demand for euros, which will lead to an increase in its value with respect to the U.S. dollar. This is because more U.S. dollars will be exchanged for euros, leading to an increase in the euro's value. Other things being equal means there are no other factors influencing the exchange rate at that time.

Any Event That Increases the U