All else being equal,a decrease in the desirable characteristics of foreign financial securities causes the supply of dollars to ________ and the dollar will ________ relative to foreign currencies.

Question

Quizplus · Accepted Answer

A decrease in the desirability of foreign financial securities means that investors are less inclined to invest abroad, reducing the supply of dollars in the foreign exchange market. This reduced supply of dollars leads to an appreciation of the dollar relative to foreign currencies.

All Else Being Equal,a Decrease in the Desirable Characteristics of Foreign