If the demand for dollars outstrips its supply and if the supply of Japanese yen is greater than the demand for it, what will happen?
A) The dollar will appreciate against the yen.
B) The dollar will depreciate against the yen.
C) The exchange rates will remain the same.
D) The yen will appreciate against the dollar.

Question

Quizplus · Accepted Answer

At the most basic level, exchange rates are determined by the demand and supply of one currency relative to the demand and supply of another.

If the Demand for Dollars Outstrips Its Supply and If