Assume that the vertical axis of the graph for the foreign exchange market measures the exchange rate in euros per dollar. As the exchange rate rises
A) American products become more attractive and more dollars are desired.
B) the euro can buy more dollars.
C) American goods become less attractive and fewer dollars are demanded.
D) the dollar depreciates against the euro.

Question

Quizplus · Accepted Answer

When the exchange rate rises, meaning it takes more euros to buy a dollar, American goods become more expensive for Europeans, making them less attractive and leading to a decrease in demand for dollars.

Assume That the Vertical Axis of the Graph for the Foreign