An increase or decrease in domestic income will cause the demand for foreign exchange to:

Question

Quizplus · Accepted Answer

An increase in domestic income typically leads to an increase in imports as consumers and businesses have more money to spend, which increases the demand for foreign currencies to pay for these imports. Conversely, a decrease in domestic income would lead to a decrease in imports, reducing the demand for foreign exchange.

An Increase or Decrease in Domestic Income Will Cause the Demand