-Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars given the following situation,ceteris paribus: The U.S.economy suddenly experiences a recession.

Question

Quizplus · Accepted Answer

In a recession, the demand for imports typically decreases as consumers and businesses cut back on spending. This leads to a decrease in the demand for foreign currency and an increase in the demand for domestic currency, causing the supply of dollars in the foreign exchange market to decrease, shifting the supply curve to the left.

-Choose the Letter of the Diagram in Figure 36