Assume that there is an increased demand in the United States for European wines. If all other factors are held constant, this change will result in
A) a decrease in the value of the euro.
B) an increase in the exchange rate for euros.
C) an appreciation of the dollar.
D) a movement along the demand curve for euros.

Question

Quizplus · Accepted Answer

An increased demand for European wines means more euros are needed to purchase these wines, leading to an increase in the exchange rate for euros as the demand for euros rises.

Assume That There Is an Increased Demand in the United