In foreign exchange markets, the effect of an increase in the supply of dollars on the value of the dollar is the same as that of:

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Quizplus · Accepted Answer

An increase in the supply of dollars typically leads to a depreciation of the dollar's value. This effect is similar to a decrease in the demand for dollars, as both situations increase the relative availability of dollars compared to foreign currencies. It is also akin to a decrease in the supply of foreign currencies, which would make foreign currencies scarcer relative to dollars, thus depreciating the dollar.

In Foreign Exchange Markets, the Effect of an Increase in the Supply