As the price level rises,the interest rate
A)falls,so the supply of dollars in the market for foreign currency exchange shifts left.
B)falls,so the supply of dollars in the market for foreign currency exchange shifts right.
C)rises,so the supply of dollars in the market for foreign currency exchange shifts left.
D)rises,so the supply of dollars in the market for foreign currency exchange shifts right.

Question

Quizplus · Accepted Answer

As the price level rises, the interest rates also rise due to the increase in demand for borrowed money to finance spending. This increase in interest rates causes foreign investors to demand more U.S. dollars, leading to a shift to the right in the demand curve for dollars. As a result, the supply of dollars in the market for foreign currency exchange shifts to the left.

As the Price Level Rises,the Interest Rate