The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Demand for U.S. dollars by speculators is likely to increase if the dollar is expected to depreciate in the near future.

Question

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2
 
-Demand for U.S. dollars by speculators is likely to increase if the dollar is expected to depreciate in the near future.

Quizplus · Accepted Answer

Speculators are more likely to demand U.S. dollars if they expect it to appreciate in the near future, as this would allow them to make a profit by buying dollars now and selling them later at a higher value.

The Figure Given Below Depicts the Foreign Exchange Market for British