Which of the following will generate a demand for country X's currency in the foreign exchange market?
A)travel by foreigners in country X
B)the desire of foreigners to buy stocks and bonds of firms in country X
C)the exports of country X
D)all of the above

Question

Quizplus · Accepted Answer

All of the above options generate demand for country X's currency in the foreign exchange market. When foreigners travel to country X, they need to exchange their currency for country X's currency, thereby increasing demand. Similarly, when foreigners buy stocks and bonds of firms in country X, they need to exchange their currency for country X's currency, leading to an increase in demand. Lastly, when country X exports goods and services to other countries, they receive payment in foreign currency, which leads to an increase in the demand for their own currency.

Which of the Following Will Generate a Demand for Country