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.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter34: International Finance

Section34.3: Fixed Exchange Rates

Problem 3ST

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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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