In the Foreign Exchange Market,foreign Residents Wishing to Purchase U

question 3

Multiple Choice

In the foreign exchange market,foreign residents wishing to purchase U.S.exports or U.S.real and financial assets must:

• A)demand U.S. dollars by supplying their foreign currency.
• B)demand U.S. dollars by supplying U.S. dollars.
• C)supply U.S. dollars by demanding their foreign currency.
• D)none of the above.

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Definitions:

Shortage

A market condition whereby the request for a service or product goes beyond what is readily available.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the point where supply and demand curves intersect, resulting in market equilibrium.

Demand Schedules

A table that shows the quantity of a good that consumers are willing and able to purchase at various prices, holding all else constant.

Demand Curve

A graphical representation of the quantity of a good that consumers are willing and able to buy at different prices.