The demand for dollars slopes downward because as the dollar appreciates,________,which leads to fewer dollars being demanded.

Question

Quizplus · Accepted Answer

As the dollar appreciates, the exchange rate rises, meaning that exported goods become more expensive for foreign buyers. This makes American goods less competitive in the global market and leads to a decrease in demand for dollars. Conversely, if the dollar depreciates, the exchange rate falls, making exported goods less expensive and increasing the demand for dollars.

The Demand for Dollars Slopes Downward Because as the Dollar