The quantity of foreign currency demanded or supplied by residents of any country depends mainly on

Question

Quizplus · Accepted Answer

The exchange rate between the domestic currency and the foreign currency is the main factor that affects the demand and supply of foreign currency by the residents of a country. If the exchange rate of a foreign currency is high, residents of that country are inclined to demand that currency. Conversely, if the exchange rate is low, then the demand for that currency decreases.

The Quantity of Foreign Currency Demanded or Supplied by Residents