Which of these is NOT a determinant of exchange rates?
A) foreign tastes and preferences for U.S. goods and services
B) foreign confidence in U.S financial markets
C) foreign demand for U.S. gold
D) foreign expectations of future exchange rates

Question

Quizplus · Accepted Answer

The demand for U.S. gold does not have a direct impact on exchange rates. The determinants of exchange rates are factors that affect the supply and demand for a country's currency in the foreign exchange market. The other three options listed all affect the supply and demand for U.S. dollars, and therefore impact exchange rates.

Which of These Is NOT a Determinant of Exchange Rates