Which of the following is most likely to cause the supply of dollars to increase?
A)increases in foreign income
B)decreases in U.S. income
C)increases in foreign interest rates relative to U.S. interest rates
D)decreases in the dollar price of U.S. goods relative to the prices of foreign goods

Question

Quizplus · Accepted Answer

If foreign interest rates are higher than U.S interest rates, investors are more likely to invest in foreign countries, causing the supply of dollars to increase as they sell dollars to buy foreign currency.

Which of the Following Is Most Likely to Cause the Supply