A change in foreign interest rates relative to U.S. interest rates will
A)increase the quantity supplied of dollars in the foreign exchange market.
B)increase or decrease the quantity supplied of dollars in the foreign exchange market.
C)increase total revenue in the foreign exchange market.
D)increase or decrease the demand or supply of dollars in the foreign exchange market.

Question

Quizplus · Accepted Answer

A change in foreign interest rates relative to U.S. interest rates can either increase or decrease the demand or supply of dollars in the foreign exchange market, depending on whether foreign interest rates become more or less attractive compared to U.S. rates.

A Change in Foreign Interest Rates Relative to U