Asked by Chase Dunford on Jul 21, 2024
Verified
The demand curve for euros shows:
A) a direct relationship between the dollar price of euro and the quantity of euros demanded.
B) an inverse relation between the dollar price of euro and the quantity of euros demanded.
C) that the higher the dollar price of euro,the greater the quantity of euros demanded.
D) that the more expensive it is to buy euros,the larger the quantity of European goods demanded by Americans.
E) that the dollar price of euro is being fixed by the European Union.
Demand Curve
A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.
Euros
The legitimate monetary unit for the eurozone, adopted by 19 of the European Union's 27 member countries.
- Ascertain the components affecting the equilibrium of demand and supply in the foreign exchange sector.
Verified Answer
EK
Eureka KennedyJul 22, 2024
Final Answer :
B
Explanation :
The demand curve for euros shows an inverse relationship between the dollar price of euro and the quantity of euros demanded. As the dollar price of euro increases, the quantity of euros demanded decreases because it becomes more expensive for Americans to buy European goods and travel to Europe. This is a typical demand curve for a currency in a foreign exchange market.
Learning Objectives
- Ascertain the components affecting the equilibrium of demand and supply in the foreign exchange sector.