In the forex, the demand for dollars will increase if:
A) foreigners wish to buy U.S. goods.
B) foreigners wish to sell U.S. financial assets.
C) interest rates are lower in the U.S. relative to interest rates abroad.
D) interest rates are equal in the US and abroad.

Question

Quizplus · Accepted Answer

When foreigners wish to buy U.S. goods, they need dollars to pay for those goods. This increases the demand for dollars and causes the value of the dollar to rise.

In the Forex, the Demand for Dollars Will Increase If