Consider the demand for Russian rublesRussian rubles in exchange for British pou
ID: 1121284 • Letter: C
Question
Consider the demand for Russian rublesRussian rubles in exchange for British poundsBritish pounds. Which of the following will not increase the foreign currency demand for the rubleruble? Foreign firms and consumers who want to invest in RussiaRussia. B. Currency traders who believe that the value of the rubleruble in the future will be greater than its value today. C. Foreign firms and consumers who want to buy goods and services from RussiaRussia. D. Currency traders who believe that the value of the rubleruble in the future will be less than its value today
Explanation / Answer
Option d is correct. When currency traders believe that Rubel will depreciate in future they will start selling it. This will increase its supply and will depreciate it now. Hence all the other factors will increase the demand for Rubel while this factor will increase the supply of Rubel