In the foreign exchange market, an increase in the world demand for U.S. exports shifts the
A) demand curve for U.S. dollars rightward.
B) demand curve for U.S. dollars leftward.
C) supply curve for U.S. dollars leftward.
D) supply curve for U.S. dollars rightward.

Question

Quizplus · Accepted Answer

When there is an increase in the world demand for U.S. exports, foreign buyers need more U.S. dollars to pay for these exports. This increases the demand for U.S. dollars in the foreign exchange market, shifting the demand curve for U.S. dollars rightward.

In the Foreign Exchange Market, an Increase in the World