Which of the following would not cause the supply of U.S. dollars in the forex market to increase?
A) U.S. interest rates are low relative to foreign interest rates.
B) Investors' confidence in foreign economies increases.
C) U.S. consumers prefer foreign goods to U.S. goods.
D) Investors' confidence in U.S. investments increases.

Question

Quizplus · Accepted Answer

When investors' confidence in U.S. investments increases, they are more likely to invest in the U.S., which would increase the demand for U.S. dollars rather than the supply. Choices A, B, and C all involve scenarios where dollars would be sold for foreign currency, thereby increasing the supply of dollars in the forex market.

Which of the Following Would Not Cause the Supply of U.S