All else being equal,an increase in the foreign demand for U.S.goods causes the demand for dollars to ________ and the dollar will ________ relative to foreign currencies.

Question

Quizplus · Accepted Answer

An increase in foreign demand for U.S. goods means that foreigners will need to buy more dollars to purchase these goods, leading to an increase in demand for the U.S. dollar. When demand for a currency increases, its value appreciates relative to other currencies.

All Else Being Equal,an Increase in the Foreign Demand for U.S.goods