Question

Question 7

For the country using another country's currency for domestic transactions, the result is usually:

		that the country whose currency is being used formally requests that it's currency not be used.
		the country whose currency is being used encourages the use of its currency because it increases demand for and the value of the currency.
		the currency markets stop making the currency of the country that is being used available to the country that is using that currency.
		that the country's citizen end up holding substantial assets denominated in the currency of the other country that is being used.

Answer 1

When a country uses the currency of another country for its domestic transactions, then the demand for foreign country currency goes up. A greater demand drives the value of the foreign currency up. So, the correct answer is option B.

Can you please upvote? Thank You :-)