Which of the following statements is true ? A. A surge in the foreign demand for...
Which of the following statements is true ?
A. A surge in the foreign demand for American securities, goods, and services will cause an increase in USD supply
B. An increase in the exchange rates will cause a surge in the quantity demanded of USD per month
C. An increase in the exchange rate will cause a decline in the quantity supplied of USD per month
D. A surge in American demand for foreign securities, good, and services will cause an increase in USD supply.
Homework Answers
Answer - Option A
A surge in the foreign demand for American securities , goods and services will cause an increase in the USD supply
This will happen because due to the increase in the foreign demand for american american they will need more of USD to purchase the securities. Hence there will be the inflow of USD in the economy hence the supply will increase.
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