Which of the following is included in the supply of U.S. dollars in the market for foreign-currency exchange in the open-economy macroeconomic model?
A)A retail outlet in Canada wants to buy handbags from a U.S. manufacturer.
B)A U.S. bank loans dollars to Karen, a U.S. resident, who wants to purchase a car in the U.S.
C)A U.S. based law firm wants to build a new office in Japan.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A U.S. based law firm wanting to build a new office in Japan would require converting U.S. dollars into Japanese yen, thus increasing the supply of U.S. dollars in the foreign exchange market.

Which of the Following Is Included in the Supply of U.S