In foreign exchange markets, who demands dollars and who supplies dollars?
What will be an ideal response?
Foreign residents buying U.S. goods, services, or assets demand dollars and U.S. residents buying foreign goods, services, or assets supply dollars. In foreign exchange markets, the supply of dollars is a demand for foreign currency and the supply of a foreign currency is a demand for dollars.
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Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium
Using the static AD-AS model in the figure above, this would be depicted as a movement from A) D to C. B) B to A. C) C to B. D) E to A. E) A to E.
The consumption component of GDP includes spending on
a. durable goods and nondurable goods, but not spending on services. b. durable goods and services, but not spending on nondurable goods. c. nondurable goods and services, but not spending on durable goods. d. durable goods, nondurable goods, and services.