In the foreign exchange market, which of the following results in a movement along the supply curve of dollars?
A) a change in the expected future exchange rate
B) a change in the U.S. interest rate
C) a change in the current exchange rate
D) None of the above answers are correct.

Question

Quizplus · Accepted Answer

Movements along the supply curve of a currency, such as the dollar, are caused by changes in the currency's own price, which in this context is the current exchange rate. Changes in expectations about future exchange rates or interest rates would shift the supply curve, not cause movement along it.

In the Foreign Exchange Market, Which of the Following Results