In the foreign exchange market, which of the following results in a movement along the supply curve of dollars?
A) a change in the expected future exchange rate
B) a change in the current exchange rate
C) a change in the U.S. interest rate
D) None of the above answers are correct.

Question

Quizplus · Accepted Answer

A change in the current exchange rate would result in a movement along the supply curve of dollars, as buyers and sellers adjust their behavior in response to the changed price of dollars. A change in the expected future exchange rate or the U.S. interest rate would shift the supply curve of dollars, as buyers and sellers adjust their behavior based on their expectations of future demand and supply for dollars. Therefore, A and C are incorrect. D is incorrect because there is a correct answer.

In the Foreign Exchange Market, Which of the Following Results