Of the following, when would the U.S. exchange rate rise the most?
A) When the supply of U.S. dollars decreases and the demand for them increases.
B) When the supply of and demand for U.S. dollars decrease.
C) When the supply of and demand for U.S. dollars increase.
D) When the supply of U.S. dollars increases and the demand for them decreases.

Question

Quizplus · Accepted Answer

When the supply of U.S. dollars decreases and the demand for them increases, there are fewer dollars available for purchase, while demand for dollars remains strong. This creates a situation where buyers are willing to pay more for each dollar, driving up the exchange rate.

Of the Following, When Would the U