Of the following, when would the U.S. exchange rate rise the most?
A) when the supply of and demand for U.S. dollars increase
B) when the supply of U.S. dollars increases and the demand for them decreases
C) when the supply of U.S. dollars decreases and the demand for them increases
D) when the supply of and demand for U.S. dollars decrease

Question

Quizplus · Accepted Answer

The exchange rate for the U.S. dollar would rise the most when the supply of U.S. dollars decreases and the demand for them increases. This is because a decrease in supply, coupled with an increase in demand, would make U.S. dollars more valuable relative to other currencies, thus increasing the exchange rate.

Of the Following, When Would the U