Currency traders expect the value of the dollar to fall. - 3584

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 Currency traders expect the value of the dollar to fall. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

A.   Demand for dollars will increase, and supply of dollars will decrease. B.   Demand for dollars will decrease, and supply of dollars will increase. C.   Demand for dollars will increase, and supply of dollars will increase. D.   Demand for dollars will decrease, and supply of dollars will decrease. 

 
Solution Description

 How does an increase in a country's exchange rate affect its balance of trade?

A.   An incr