Other things the same, if the U.S. price level falls, then the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate falls. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate falls.
Other things the same, if the U.S. price level falls, then the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate falls. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate falls.
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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Other things the same, if the U.S. price level falls, then
the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate rises.
the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate falls.
the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate rises.
the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate falls.
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