In the forex,the demand for dollars will increase if:
A)foreigners wish to buy U.S.goods.
B)foreigners wish to buy U.S.financial assets.
C)interest rates are higher in the U.S.relative to interest rates abroad.
D)All of these things will increase the demand for dollars.

Question

Quizplus · Accepted Answer

All of the given factors - foreigners buying U.S. goods or financial assets, and higher interest rates in the U.S. - can increase the demand for dollars in the forex market. When foreigners buy U.S. goods or financial assets, they need to convert their own currency into dollars, increasing the demand for dollars. Similarly, when interest rates are higher in the U.S., foreign investors may seek to invest in U.S. assets, again requiring them to buy dollars, and thus increasing demand.

In the Forex,the Demand for Dollars Will Increase If