In the foreign exchange market, the supply curve for dollars slopes upwards because
A)supply curves always slope upwards.
B)as the exchange rate rises, imports become cheaper, and more dollars are supplied to pay for the increase in the quantity of imports.
C)as the exchange rate rises, imports become more expensive, and more dollars are supplied to pay for the imports.
D)as the exchange rate rises, more dollars are supplied since the profit from selling dollars falls.

Question

Quizplus · Accepted Answer

As the exchange rate rises, imports become cheaper, leading to an increase in the quantity of imports, which results in more dollars being supplied to pay for these imports.

In the Foreign Exchange Market, the Supply Curve for Dollars