Which of the following is a factor that determines the amount of dollars supplied in the foreign exchange market?

Question

Quizplus · Accepted Answer

All of the above factors affect the amount of dollars supplied in the foreign exchange market. The exchange rate affects the willingness of individuals and entities to supply dollars in exchange for other currencies. Interest rates in foreign countries can influence investment decisions, and therefore affect the amount of foreign currency that needs to be purchased, potentially increasing the supply of dollars. Finally, U.S. interest rates affect both the incentive to invest domestically or abroad and impact the demand for U.S. dollars for investment purposes, again influencing the supply of dollars in the foreign exchange market.

Which of the Following Is a Factor That Determines the Amount