Today,the dollar is worth 1.15 euros.Due to changes in economic conditions,in one month people come to expect the dollar will be worth 1.20 euros.This belief

Question

Quizplus · Accepted Answer

When people expect the dollar to be worth more euros in the future, they will want to buy more dollars now in order to benefit from the increased exchange rate. This increase in demand for dollars will therefore raise the value of the dollar relative to the euro.

Today,the Dollar Is Worth 1