Asked by Daniil Yagolnikov on Jul 26, 2024
Verified
U.S. imports
A) increase the foreign demand for foreign currencies.
B) increase the domestic demand for foreign currencies.
C) decrease the foreign supply of foreign currencies.
D) increase the domestic supply of foreign currencies.
Foreign Currencies
The currencies used in countries other than one's own, involved in international trade and investment.
U.S. Imports
refer to goods and services purchased from other countries by the United States, contributing to its economy's supply side.
- Master the fundamentals of foreign exchange markets, focusing on the drivers of currency supply and demand and the significance of exports and imports in determining exchange rates.
Verified Answer
AC
Addie ComerfordAug 01, 2024
Final Answer :
B
Explanation :
When the U.S. imports goods or services, it needs to pay for them using the currency of the exporting country. This increases the demand for foreign currencies as U.S. dollars are exchanged for the foreign currency needed to complete the transaction. Therefore, U.S. imports increase the domestic demand for foreign currencies.
Learning Objectives
- Master the fundamentals of foreign exchange markets, focusing on the drivers of currency supply and demand and the significance of exports and imports in determining exchange rates.