A change in foreign real incomes will
A)increase the quantity demanded of dollars in the foreign exchange market.
B)increase or decrease the quantity supplied of dollars in the foreign exchange market.
C)increase or decrease the supply of dollars in the foreign exchange market.
D)increase or decrease the demand for dollars in the foreign exchange market.

Question

Quizplus · Accepted Answer

A change in foreign real incomes will affect the demand for goods and services from the US, which in turn affects the demand for dollars to purchase those goods and services. Therefore, a change in foreign real incomes will increase or decrease the demand for dollars in the foreign exchange market.

A Change in Foreign Real Incomes Will