Which of the following is included in the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model?
A)A retail outlet in Russia wants to buy semi-conductors from a U.S.manufacturer.
B)A U.S.bank loans dollars to Blair, a U.S.resident, who wants to purchase a new house in the United States.
C)A U.S.based mutual fund wants to purchase bonds issued by an Italian corporation.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

When a U.S. mutual fund wants to purchase foreign bonds, it supplies dollars to the foreign exchange market to obtain the foreign currency needed for the purchase.

Which of the Following Is Included in the Supply of Dollars