If the supply of dollars in the market for foreign-currency exchange shifts left,then the exchange rate
A)rises and the quantity of dollars exchanged falls.
B)rises and the quantity of dollars exchanged does not change.
C)rises and the quantity of dollars exchanged rises.
D)falls and the quantity of dollars exchanged does not change.

Question

Quizplus · Accepted Answer

A leftward shift of the supply curve means that there are fewer dollars available for exchange, which will increase the demand for dollars and result in an appreciation of the exchange rate. As a result, the quantity of dollars exchanged will decrease because dollars are more expensive relative to other currencies.

If the Supply of Dollars in the Market for Foreign-Currency