Other things remaining the same, the
A) larger the value of U.S. imports, the smaller is the quantity of foreign currency demanded.
B) larger the value of U.S. imports, the greater is the quantity of U.S. dollars supplied to the foreign exchange market.
C) lower the exchange rate, the cheaper are foreign-produced goods and services.
D) higher the exchange rate, the greater is the expected profit from selling dollars.

Question

Quizplus · Accepted Answer

When the value of U.S. imports increases, more U.S. dollars are supplied to the foreign exchange market to pay for these imports, increasing the quantity of dollars supplied.

Other Things Remaining the Same, the