Any event that increases the U.S. demand for euros should result in a(n) ____ in the value of the euro with respect to ____, other things being equal.
A) increase; U.S. dollar
B) increase; nondollar currencies
C) decrease; nondollar currencies
D) decrease; U.S. dollar

Question

Quizplus · Accepted Answer

An increase in U.S. demand for euros means that more dollars are being exchanged for euros, which increases the demand for euros in the foreign exchange market. This increased demand, all things being equal, should lead to an increase in the value of the euro with respect to the U.S. dollar.

Any Event That Increases the U