When a Good Is Imported into the United States, There

question 63

Multiple Choice

When a good is imported into the United States, there is created a

• A) supply of foreign currency with no effect on the market for the dollar.
• B) demand for foreign currencies and a supply of dollars.
• C) demand for dollars with no effect on markets for foreign currencies.
• D) supply of foreign currencies and a demand for dollars.

---

Definitions:

Common Currency

A currency that is used by multiple countries, facilitating trade and financial transactions between them.

Exchange-rate Risk

The risk that changes in the relative value of currencies will negatively affect the value of investments.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports.

Present Consumption

The act of using goods and services for immediate needs or desires, rather than saving or investing for future use.