The demand for dollars is downward sloping because when dollar value rises,
A)Foreigners demand more of US goods and services
B)Foreigners demand less of US goods and services
C)Foreigners demand more dollars
D)It does not depend on the dollar value

Question

Quizplus · Accepted Answer

When the value of the dollar rises, foreign goods become relatively more expensive for American consumers, and American goods become relatively cheaper for foreign consumers. Therefore, foreigners will demand fewer American goods and services, reducing their demand for dollars. This leads to a downward-sloping demand curve for dollars.

The Demand for Dollars Is Downward Sloping Because When Dollar