Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model to the right?
A)the exchange rate rises
B)the exchange rate falls
C)the expected rate of return on U.S.assets rises
D)the expected rate of return on U.S.assets falls

Question

Quizplus · Accepted Answer

A decrease in the expected rate of return on U.S. assets makes them less attractive to foreign investors, leading to an increase in the supply of dollars as investors seek to invest in foreign assets instead.

Which of the Following Would Tend to Shift the Supply