The value of the U.S. dollar on the foreign exchange market will tend to

Question

Quizplus · Accepted Answer

All the statements are correct because they describe scenarios that affect the supply and demand dynamics of the U.S. dollar on the foreign exchange market, which in turn influences its value. An increase in demand for U.S. exports (A) leads to more foreign currency being exchanged for dollars, increasing the dollar's value. An increase in demand for foreign imports by the U.S. (B) results in more dollars being exchanged for foreign currencies, decreasing the dollar's value. When monetary authorities sell U.S. dollars for foreign currencies (C), they increase the supply of dollars on the foreign exchange market, which can decrease its value.

The Value of the U