In the foreign exchange market, the higher the dollar's exchange rate, the
A)smaller the supply of dollars.
B)larger the supply of dollars.
C)larger the quantity supplied of dollars.
D)smaller the quantity supplied of dollars.

Question

Quizplus · Accepted Answer

A higher exchange rate makes it more attractive for holders of dollars to exchange them for foreign currency, increasing the quantity supplied of dollars.

In the Foreign Exchange Market, the Higher the Dollar's Exchange