Consider the demand for U.S. dollars in exchange for Mexican pesos. Which of the
ID: 1140836 • Letter: C
Question
Consider the demand for U.S. dollars in exchange for Mexican pesos. Which of the following will not increase the foreign currency demand for the dollar?
A. Foreign firms and consumers who want to buy goods and services from the United States.
B. Currency traders who believe that the value of the dollar in the future will be less than its value today.
C. Currency traders who believe that the value of the dollar in the future will be greater than its value today.
D. Foreign firms and consumers who want to invest in the United States
Explanation / Answer
Solution :- Answer is B
Reason when currency trader is expectedly shows that value will fall for rubel in future this reason will be main problem for investor and he will not invest or demand for Russian currency.
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