When the exchange rate falls, in the foreign exchange market the
A) quantity demanded of the currency decreases.
B) demand for the currency increases.
C) demand for the currency decreases.
D) quantity demanded of the currency increases.

Question

Quizplus · Accepted Answer

When the exchange rate falls, the currency becomes cheaper, leading to an increase in the quantity demanded of the currency.

When the Exchange Rate Falls, in the Foreign Exchange Market