Other things remaining the same, the ________ the exchange rate for Australian dollars, the greater the ________ in the foreign exchange market.
A)lower; value of Australian imports
B)higher; quantity of Australian dollars demanded
C)higher; expected profits from holding Australian dollars
D)higher; quantity of Australian dollars supplied

Question

Quizplus · Accepted Answer

A higher exchange rate makes Australian goods more expensive for foreign buyers, increasing the supply of Australian dollars as exporters convert foreign currency back to Australian dollars.

Other Things Remaining the Same, the ________ the Exchange Rate