Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange of the open-economy macroeconomic model to the left?
A)The exchange rate rises.
B)The exchange rate falls.
C)The expected rate of return on U.S.assets rises.
D)The expected rate of return on U.S.assets falls.

Question

Quizplus · Accepted Answer

The expected rate of return on U.S. assets rises, making U.S. assets more attractive to foreign investors, leading to a decrease in the supply of dollars in the market.

Which of the Following Would Tend to Shift the Supply