Increases in the price level (P) and real GDP (Y) would tend to decrease the demand for foreign exchange.

Name: Increases in the price level (P) and real GDP (Y) would tend to decrease the demand for foreign exchange.
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Increases in the price level (P) and real GDP (Y) would tend to increase the demand for imports as people and businesses have more income and are buying more, including foreign goods. This increases the demand for foreign exchange to pay for these imports.

Increases in the Price Level (P) and Real GDP (Y)