If proportion of money individuals want to hold increases in the U.S. and the proportion of money individuals want to hold remains constant in the EU then:
A) the dollar should appreciate in nominal terms.
B) the dollar should depreciate in nominal terms.
C) the dollar should appreciate in real terms.
D) the dollar should depreciate in real terms.

Question

Quizplus · Accepted Answer

When individuals in the U.S. want to hold more money, the demand for the dollar increases, leading to an appreciation of the dollar in nominal terms.

If Proportion of Money Individuals Want to Hold Increases in the U.S