In the foreign exchange market, when the demand for the euro increases, the equilibrium U.S. dollar price of the euro _____ and the U.S. dollar _____.

Question

Quizplus · Accepted Answer

When the demand for the euro increases, the equilibrium U.S. dollar price of the euro rises because more dollars are needed to purchase the same amount of euros. Consequently, the U.S. dollar depreciates in value relative to the euro.

In the Foreign Exchange Market, When the Demand for the Euro