An increase in the demand for American-made goods will
A)increase the supply of dollars on the foreign exchange market.
B)decrease the supply of dollars on the foreign exchange market.
C)increase the demand for dollars on the foreign exchange market.
D)decrease the demand for dollars on the foreign exchange market.

Question

Quizplus · Accepted Answer

An increase in the demand for American-made goods means that foreign countries are now demanding more US dollars to purchase those goods. This means that the demand for dollars on the foreign exchange market will increase, as foreign countries need to buy more dollars to buy American goods.

An Increase in the Demand for American-Made Goods Will