-Using the above figure, an increase in the demand for Dutch goods by U. S. consumers will lead to
A) a depreciation in the Dutch currency.
B) an increase in the supply of Dutch currency as foreign exchange.
C) a decrease in the supply of Dutch currency as foreign exchange.
D) an appreciation in the Dutch currency.

Question

-Using the above figure, an increase in the demand for Dutch goods by U. S. consumers will lead to
A) a depreciation in the Dutch currency. 
B) an increase in the supply of Dutch currency as foreign exchange. 
C) a decrease in the supply of Dutch currency as foreign exchange. 
D) an appreciation in the Dutch currency.

Quizplus · Accepted Answer

An increase in the demand for Dutch goods by U.S. consumers will lead to an increased demand for the Dutch currency, causing it to appreciate.

-Using the Above Figure, an Increase in the Demand for Dutch