Question

Which two would tend to increase the supply of Namibian Dollar on the foreign exchange market/

a) increased demand for imports into Namibia

b) increased demand for exports from Namibia

c) Increased inflows of foreign currencies into Namibian dollar deposit accounts in Namibia

d) Increased outflows of Namibian dollar into foreign currency accounts overseas

e) Reduction in aid by the Namibian Government to developing economies

1) a & e

2) b & c

3) a& c

4) a& d

Answer 1

Answer- Option 4.

Supply of Namibian dollar would increase in foreign exchange market when imports are made. When imports are made home currency is exchanged with foreign currency in market. So supply of home currency increases and demand for foreign currency increases due to imports.

When Namibian currency is deposited in foreign then also supply would increase.