Other things the same,if the price level rises,people
A)increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases.
B)increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases.
C)decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases.
D)decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases.

Question

Quizplus · Accepted Answer

If the price level rises, people generally have less purchasing power which means they have less money available for investing in foreign bonds. Therefore, they are likely to decrease their foreign bond purchases, resulting in a decrease in the supply of dollars in the market for foreign-currency exchange.

Other Things the Same,if the Price Level Rises,people