Question

Which of the following would shift the demand for dollars in the market for foreign currency exchange to the right?

a. foreign citizens want to buy more U.S. goods and services at a given exchange rate
b. foreign citizens want to buy fewer U.S. goods and services at a given exchange rate
c. foreign citizens want to buy more U.S. bonds
d. foreign citizens want to by fewer U.S. bonds

Answer 1

A) foreign citizens want to buy more U.S. goods and services at a given exchange rate

Step-by-step explanation:

In a free floating exchange rate market, when foreign companies and individuals purchase more goods and services from the US, it mans that the US is exporting more. When any country exports more goods or services its currency appreciates since more people want it (law of supply and demand) in order to be able pay for US products or services.