In a floating exchange rate regime,the exchange rate is the equilibrium price of the currency.Changes in demand for a currency will cause changes in the equilibrium exchange rate.Which of these statements in relation to the AUD demand curve in the FX market is incorrect?
A) The purchase of AUD goods, services or assets generates a demand for AUD.
B) A depreciation of the AUD equates to a fall in the price of Australian goods, services and assets.
C) The demand curve is downward-sloping; as the price of the AUD increases the demand for the AUD also increases.
D) A fall in the cost of Australian goods, services or assets will result in increased demand for the AUD.
Correct Answer:
Verified
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