The quantity supplied of dollars is likely to ________ when the exchange rate of yen per dollar ________.
A)not change; rises
B)rise; rises
C)not change; falls
D)rise; falls

Question

Quizplus · Accepted Answer

When the exchange rate of yen per dollar rises, it means that each dollar can be exchanged for more yen, making holding dollars more valuable. Therefore, the quantity of dollars supplied in the foreign exchange market is likely to rise as holders of dollars are more willing to exchange them for yen at the higher rate.

The Quantity Supplied of Dollars Is Likely to ________ When