Asked by joseph sciotto on Jul 08, 2024
Verified
Which of the following creates a demand in the U.S. for a foreign country's currency?
A) Demand for that country's goods and services in the U.S.
B) US investors' demand for the stocks of companies in that country
C) US firms' interest in making direct investments in that country
D) Both a. and b. are correct.
E) All of the above are correct.
Foreign Currency
Currency used in a country other than one’s own, representing a medium of exchange for goods and services in that foreign country.
Demand
The quantity of a good or service that consumers are willing and able to purchase at a given price over a specific period.
- Describe the fundamentals of how currency valuation is determined, focusing on aspects like demand and supply dynamics, as well as crucial economic indicators.
Verified Answer
WE
william elijahJul 11, 2024
Final Answer :
E
Explanation :
All the options listed create a demand for a foreign country's currency in the U.S. This is because purchasing goods and services, investing in stocks, or making direct investments in a foreign country requires converting U.S. dollars into the foreign country's currency, thereby increasing the demand for that currency.
Learning Objectives
- Describe the fundamentals of how currency valuation is determined, focusing on aspects like demand and supply dynamics, as well as crucial economic indicators.