The demand for euros on foreign exchange markets slopes:
A) upward because foreign consumers buy fewer European goods when the value of the euro increases.
B) upward because foreign consumers buy more European goods when the value of the euro increases.
C) downward because foreign consumers buy fewer European goods when the value of the euro increases.
D) downward because foreign consumers buy more European goods when the value of the euro increases.

Question

Quizplus · Accepted Answer

The demand for euros slopes downward because as the value of the euro increases, European goods become more expensive for foreign consumers, leading them to buy fewer European goods.

The Demand for Euros on Foreign Exchange Markets Slopes