Use the following to answer questions .
Exhibit: Exchange Rates
-(Exhibit: Exchange Rates) The demand curve of dollars represents
I. U.S. purchases of imported goods and services.
II. payments to U.S. owners of foreign assets.
III. demand for U.S. Treasury bonds by U.S. residents.
IV. foreigners' purchases of U.S. assets.

Question

Use the following to answer questions .
Exhibit: Exchange Rates 
-(Exhibit: Exchange Rates) The demand curve of dollars represents
I. U.S. purchases of imported goods and services.
II. payments to U.S. owners of foreign assets.
III. demand for U.S. Treasury bonds by U.S. residents.
IV. foreigners' purchases of U.S. assets.

Quizplus · Accepted Answer

The demand curve of dollars represents payments to U.S. owners of foreign assets and foreigners' purchases of U.S. assets. Option I is incorrect because U.S. purchases of imported goods and services are represented by the supply curve of dollars. Option III is incorrect because demand for U.S. Treasury bonds by U.S. residents is not represented on this graph.

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