If there is an increase in th demand for US automobiles the

If there is an increase in th demand for U.S. automobiles, the

A. demand for dollars will fall

B. Supply of dollars will fall

C. Demand for dollars will rise

D. supply of dollars will rise

Solution

If there is an increase in demand for U.S. automobiles,demand for dollars will rise since people need more dollars to buy US automobiles.

This would lead to increase in value of dollar.So US govt will tend to sell more dollars to satisfy its demand and maintain equilbrium in exchange market.