Exhibit 18-8
-Exhibit 18-8 shows the market for euros in the US.Initially the demand for euros is represented by D₁ and the supply of euros is represented by S₁.Equilibrium in the market for euros is at point A.In response to a decrease in the income of US consumers the equilibrium moves to point H and the dollar ________.

Question

Exhibit 18-8

-Exhibit 18-8 shows the market for euros in the US.Initially the demand for euros is represented by D₁ and the supply of euros is represented by S₁.Equilibrium in the market for euros is at point A.In response to a decrease in the income of US consumers the equilibrium moves to point H and the dollar ________.

Quizplus · Accepted Answer

A decrease in the income of US consumers would likely lead to a decrease in the demand for euros, causing the dollar to appreciate in value as fewer dollars are needed to purchase euros.

Exhibit 18-8 -Exhibit 18-8 Shows the Market for Euros in the US.Initially