The supply curve for a currency is downward sloping since U.S. corporations would be encouraged to purchase more foreign goods when the foreign currency is worth less.

Question

Quizplus · Accepted Answer

The statement is incorrect. The supply curve for a currency is upward sloping, reflecting the fact that foreign suppliers will be encouraged to sell more of their goods to the U.S. when the foreign currency is worth more. This is because they will receive more U.S. dollars for each unit of their own currency, making it more profitable for them to sell to the U.S. market.

The Supply Curve for a Currency Is Downward Sloping Since