As the dollar price of a foreign currency (for example,dollars per yen)increases,__________ dollars will be demanded by foreigners,U.S.goods will be __________ expensive for foreigners,__________ U.S.goods will be purchased by foreigners,and __________ foreign currency will be supplied to the foreign exchange market.

Question

Quizplus · Accepted Answer

As the dollar price of a foreign currency increases, more dollars will be demanded by foreigners because their currency is now worth more in terms of dollars. This will make U.S. goods less expensive for foreigners, so more U.S. goods will be purchased by foreigners. As a result, more foreign currency will be supplied to the foreign exchange market.

As the Dollar Price of a Foreign Currency (For Example,dollars