Which of the following correctly describes a foreign exchange market?
a. A place where foreign goods are bought and sold in any country
b. A market in which foreign tourists can buy domestic goods
c. A global market in which people exchange one currency for another
d. A place where contracts to deliver agricultural products across countries are exchanged
e. A market where the central banks of different countries exchange government bonds
c
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When a country exports a good because the world price is higher than the no-trade domestic price, domestic purchases of the good ________ and domestic production of the good ________
A) do not change; increases B) increase; increases C) decrease; increases D) decrease; decreases E) increase; decreases
The number of Mexican pesos required to buy the same number of goods and services in Mexico as one U.S. dollar buys in the United States is a description of the ________ exchange rate
A) actual B) real C) purchasing power parity D) chain-weighted