If there is an increase in the expected future U.S. exchange rate, there is
A) an upward movement along the demand curve for dollars.
B) a downward movement along the demand curve for dollars.
C) a leftward shift of the demand curve for dollars.
D) a rightward shift of the demand curve for dollars.

Question

Quizplus · Accepted Answer

An increase in the expected future U.S. exchange rate makes holding dollars more attractive, as people anticipate that dollars will be more valuable in the future. This increases the demand for dollars now, leading to a rightward shift of the demand curve for dollars.

If There Is an Increase in the Expected Future U