Asked by Jorge Ortez on Jul 30, 2024
Verified
All of the following would add to the demand for U.S. dollars except
A) long-term capital inflows.
B) foreign travel by United States citizens.
C) exports of commodities from the United States.
D) travel by foreigners on United States airlines.
Long-term Capital Inflows
The movement of capital into a country over an extended period, often used for investment in major projects or to boost foreign reserves.
Foreign Travel
The act of traveling outside of one's home country for leisure, business, or other purposes.
U.S. Dollars
The official currency of the United States, also widely used as a global reserve currency.
- Describe the impact of variations in foreign demand for a nation's products, services, or financial assets on its currency value.
- Explain the relationship between supply and demand shifts for currencies and their impact on market prices.
Verified Answer
ZK
Zybrea KnightAug 05, 2024
Final Answer :
B
Explanation :
Foreign travel by United States citizens would increase the demand for foreign currencies as they spend abroad, not the demand for U.S. dollars. Choices A, C, and D all involve transactions that would require the use of U.S. dollars, thereby increasing their demand.
Learning Objectives
- Describe the impact of variations in foreign demand for a nation's products, services, or financial assets on its currency value.
- Explain the relationship between supply and demand shifts for currencies and their impact on market prices.