You work for a British company that is expanding its operations into continental Europe. In order to pay for the expenses of operations in Europe, your company will sell British pounds to purchase euros. Therefore, your company is a demander of pounds in the foreign exchange market.

Question

You work for a British company that is expanding its operations into continental Europe. In order to pay for the expenses of operations in Europe, your company will sell British pounds to purchase euros. Therefore, your company is a demander of pounds in the foreign exchange market.

Quizplus · Accepted Answer

Your company is a demander of euros, not pounds, because it needs euros to pay for its operations in Europe and will be selling pounds to obtain them.

You Work for a British Company That Is Expanding Its Operations