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

They make trade easier and more efficient.

Step-by-step explanation:

Answer 2

The correct answer is option a.

Step-by-step explanation:

An increase in the demand for dollars will shift the demand curve to the right, in the market for foreign exchange. Dollars are demanded by foreign consumers to pay for the import or purchase of US products.

An increase in the demand for goods and services by the foreign producers will increase the demand for US dollars as well.

This will cause the demand for dollars curve to shift to the right. This rightward shift in the curve will increase the value of US dollars in the foreign exchange market.