The demand for foreign exchange slopes downwards and to the right.

Question

Quizplus · Accepted Answer

The demand for foreign exchange slopes downwards and to the right because as the price of a foreign currency falls (making it cheaper in terms of the domestic currency), the quantity demanded for that foreign currency increases, assuming other factors remain constant. This is because cheaper foreign currency makes foreign goods, services, and investments more affordable to domestic consumers and businesses.

The Demand for Foreign Exchange Slopes Downwards and to the Right