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Which of the following is included in the demand for dollars in the market for foreign-currency exchange in the open-market macroeconomic model? a
Which of the following is included in the demand for dollars in the market for foreign-currency exchange in the open-market macroeconomic model?
a. A firm in Kenya wants to buy wheat from a Canadian firm.
b. A Japanese bank desires to purchase Canadian government securities.
c. Canadian citizen wants to buy a bond issued by a Mexican corporation.
d. A Canadian based mutual fund wants to purchase stocks issued by a Polish company.
Expert Solution
The correct answer is a. A firm in Kenya wants to buy wheat from a Canadian firm.
- The option options (b, c, and d) are all investments that are purchased and thus are not included in the demand for dollars. on the other hand, (a) represents the demand for goods and services (i.e. wheat).
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