On a foreign exchange market diagram with dollars on the horizontal axis and the yen price of the dollar on the vertical axis,the shape of the supply curve depends on the ________ and capital ________.

Question

Quizplus · Accepted Answer

The supply curve in a foreign exchange market diagram reflects how willing suppliers are to provide a currency based on factors like demand for goods and capital flows. In this context, the U.S. demand for Japanese goods increases the supply of dollars (as dollars are exchanged for yen), and capital outflows to Japan (investment from the U.S. to Japan) also increase the supply of dollars on the market, making option D correct.

On a Foreign Exchange Market Diagram with Dollars on the Horizontal