Which of the following factors do not tend to cause a change in the demand for foreign exchange?
A) changes in domestic income
B) changes in domestic prices
C) changes in foreign prices
D) changes in the exchange rate
E) None of the above

Question

Quizplus · Accepted Answer

Changes in the exchange rate itself do not cause a change in the demand for foreign exchange but are a result of changes in supply and demand for currencies. Factors like changes in income, domestic prices, and foreign prices directly affect the demand for foreign exchange by altering the attractiveness of goods, services, and investments between countries.

Which of the Following Factors Do Not Tend to Cause