A decrease in Americans' preference for foreign goods will lead to the following in the foreign exchange market:
A) an increase in the demand for dollars.
B) a decrease in the supply of dollars.
C) a depreciation of the dollar relative to foreign currencies.
D) a movement down the demand curve for dollars.

Question

Quizplus · Accepted Answer

A decrease in preference for foreign goods means Americans will buy fewer foreign goods, reducing the need to exchange dollars for foreign currency, thus decreasing the supply of dollars in the foreign exchange market.

A Decrease in Americans' Preference for Foreign Goods Will Lead