Question

When the exchange rate falls for Dollars, in the foreign exchange market the    A) quantity...

When the exchange rate falls for Dollars, in the foreign exchange market the   

A) quantity demanded of the dollar increases.     B) demand for the $ currency increases.

C) quantity demanded of the $ decreases.            D) demand for the $ decreases

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The Answer is Option "A" ,because the exchange rate falls for dollars, THE LAW OF DEMAND should be applicable .Therefor quantity demanded of the dollar increases .The law of demand means When demand increases,price decreases.

Then why we dont select the option B , because 1 st understand the differance between quantity demanded and demand.The quantity demanded means a point in single demand curve but demand refers the demand schedule. so the change should be affected only on a single point ,not in a long term. after economy improves it might change so the answer is " Quantity demanded of dollar increases."

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If the supply of dollars in the market for foreign-currency exchange shifts left, then the exchange...
If the supply of dollars in the market for foreign-currency exchange shifts left, then the exchange rate rises and the quantity of dollars exchanged falls. rises and the quantity of dollars exchanged does not change. rises and the quantity of dollars exchanged rises. falls and the quantity of dollars exchanged does not change. If a government has a budget surplus, then public saving is positive and increases national saving. is positive but decreases national saving. is negative and decreases national...
Other things the same, if the price level falls, people a. decrease foreign bond purchases, so...
Other things the same, if the price level falls, people a. decrease foreign bond purchases, so the supply of dollars in market for foreign-currency exchange increases. b. increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. c. decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. d. increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases. please explain!
When demand for Canada’s exports falls: a. supply of the Canadian dollar in the foreign exchange...
When demand for Canada’s exports falls: a. supply of the Canadian dollar in the foreign exchange market rises. b. the U.S. federal government will always respond by increasing U.S. tax rates. c. the U.S. federal government will always respond by increasing U.S. exports. d. Canadian producers will sell more goods to foreigners. e. demand of the Canadian dollar in the foreign exchange market falls.
1. The market for toasters is a competitive market. Suppose that the quantity of toasters supplied...
1. The market for toasters is a competitive market. Suppose that the quantity of toasters supplied per year depends as follows on the price of a toaster: Price (dollars per toaster) Quantity supplied (millions of toasters) 32 4.0 34 5.0 36 5.5 38 6.0 40 6.5 a. On a piece of graph paper, plot the supply curve for toasters. b. How does the quantity supplied of toasters change when the price changes? 2. The market for toasters is a competitive...
A measure of the rate of percentage change of quantity demanded with respect to price, holding...
A measure of the rate of percentage change of quantity demanded with respect to price, holding all other determinants of demand constant is a. Income elasticity of demand b. Own price elasticity of demand c. Price elasticity of market equilibrium d. Cross price elasticity of demand The value of the income elasticity of demand coefficient for Good X is  given as 0.1. This means that a. as income increases by 10 percent, quantity demanded rises by 1 percent. b. as income...
When there is a decrease in supply, all else held equal, equilibrium price falls, demand increases,...
When there is a decrease in supply, all else held equal, equilibrium price falls, demand increases, and equilibrium quantity increases. equilibrium price falls, demand does not change, and equilibrium quantity increases. equilibrium price rises, quantity demanded decreases, and equilibrium quantity decreases. equilibrium price falls, quantity demanded decreases, and equilibrium quantity decreases. equilibrium price rises, demand does not change, and equilibrium quantity increases.
Assuming the exchange rate is the foreign currency price of dollars (x), use an appropriate diagram...
Assuming the exchange rate is the foreign currency price of dollars (x), use an appropriate diagram and describe the effect of a domestic increase in G (i.e., our government increases its spending) on the value of the foreign currency.
if the exchange rate is decreasing we can say: a. both the dollar and the foreign...
if the exchange rate is decreasing we can say: a. both the dollar and the foreign currency are appreciating b. both the dollar and the foreign currency are depreciating c. the dollar is appreciating and the foreign currency is depreciating d. the dollar is depreciating and the foreign currency is appreciating e. none of the above
1. Assume that the Fed intervenes by exchanging euros for dollars in the foreign exchange market....
1. Assume that the Fed intervenes by exchanging euros for dollars in the foreign exchange market. This will cause an ____ in the supply of euros in the foreign exchange market, and will place _______ pressure on the value of the euro. a. outward shift; downward b. inward shift; downward c. inward shift; upward d. outward shift; upward 2. Under a freely floating exchange rate system a. central bank intervention in the foreign exchange market is not necessary. b. exchange...
1) Daily trading volume in the foreign exchange market was about ________ per ________ in 2019....
1) Daily trading volume in the foreign exchange market was about ________ per ________ in 2019. A) $6,600 billion; month B) $2,500 billion; month C) $6,600 billion; day D) $2,500 billion; day 2) Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this known as ________ whereas ________ are expressed as dollars per foreign unit. A) European terms; indirect B) American terms; direct C) American terms; European terms D)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT