If Europeans increase their demand for American cars, everything else constant, we should observe the following change in the U.S. dollar-euro market:

Question

Quizplus · Accepted Answer

An increase in European demand for American cars would result in an increase in demand for dollars, as Europeans would need to exchange euros for dollars in order to purchase the cars. This would shift the demand curve for dollars to the right.

If Europeans Increase Their Demand for American Cars, Everything Else