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 Afghanistan wants to buy watches from a Canadian manufacturer.
B) A Canadian bank loans dollars to Blair,a Canadian resident,who wants to purchase a new car made in Canada.
C) A Canadian-based mutual fund wants to purchase stock issued by a Polish company.
D) A Canadian resident imports a car made in Japan.

Question

Quizplus · Accepted Answer

When a Canadian-based mutual fund wants to purchase stock issued by a Polish company, it needs to supply Canadian dollars in exchange for Polish currency, thus contributing to the supply of dollars in the foreign-currency exchange market.

Which of the Following Is Included in the Supply of Dollars