If the expected future exchange rate rises, the currencyʹs
A) supply increases.
B) supply decreases.
C) quantity supplied increases.
D) exchange rate falls.

Question

Quizplus · Accepted Answer

If the expected future exchange rate rises, people anticipate that the currency will be more valuable in the future, leading to a decrease in the current supply as holders prefer to keep the currency.

If the Expected Future Exchange Rate Rises, the Currencyʹs