A U.S. resident who wants to purchase an automobile that comes from Japan:
A) will be supplying yen on the foreign exchange market.
B) will make up part of the demand for dollars on the foreign exchange market.
C) will make up part of the supply of dollars on the foreign exchange market.
D) will not be a participant in the foreign exchange market.

Question

Quizplus · Accepted Answer

When a U.S. resident purchases an automobile from Japan, they need to exchange U.S. dollars for Japanese yen to complete the transaction. This act of selling dollars to obtain yen adds to the supply of dollars on the foreign exchange market.

A US Resident Who Wants to Purchase an Automobile That Comes