Which of the following is likely to decrease the supply of U.S. dollars in the forex market?
A) If foreign interest rates are low relative to U.S. interest rates
B) If investors' confidence in foreign economies increases
C) If U.S. consumers prefer foreign goods to U.S. goods
D) All of these will increase the supply of U.S. dollars.

Question

Quizplus · Accepted Answer

If foreign interest rates are low relative to U.S. interest rates, investors are more likely to keep their money in the U.S. to take advantage of higher returns, thus decreasing the supply of U.S. dollars in the forex market.

Which of the Following Is Likely to Decrease the Supply