Other things the same,in the open-economy macroeconomic model,if the exchange rate rises,
A)the demand for dollars shifts left.
B)the demand for dollars shifts right.
C)the quantity of dollars demanded falls.
D)the quantity of dollars demanded rises.

Question

Quizplus · Accepted Answer

According to the open-economy macroeconomic model, when the exchange rate rises, it means that the value of the domestic currency is appreciating relative to the foreign currency. This leads to a decrease in the quantity of goods and services demanded from foreign consumers, and as a result, the demand for dollars falls. Therefore, option C is the correct choice.

Other Things the Same,in the Open-Economy Macroeconomic Model,if the Exchange