Consider the market for U.S. dollars. Which of the following is true in equilibrium?
I. The quantity demanded of U.S. dollars equals the U.S. money supply.
II. U.S. exports + foreign purchases of U.S. assets equal U.S. imports + purchases of foreign
Assets by U.S. citizens.
III. The quantity demanded of U.S. dollars equals the quantity supplied of U.S. dollars.
IV. The quantity supplied of U.S. dollars by U.S. nationals equals the quantity demanded of U.S. dollars by foreign nationals.
A) I and II.
B) II and III.
C) II and IV.
D) III only.
Correct Answer:
Verified
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