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

Question

Quizplus · Accepted Answer

A higher exchange rate for the dollar increases its value, encouraging holders to supply more dollars to the market to take advantage of the higher purchasing power or profit from exchanges.

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