Hyundai is a large South Korean company that produces finished steel products. Hyundai plans to buy raw steel from U.S. Steel. As a result, the demand curve for U.S. Dollars ________ and the demand curve for South Korean Won ________.

Question

Quizplus · Accepted Answer

When Hyundai buys raw steel from U.S. Steel, it needs to pay in U.S. Dollars, increasing the demand for U.S. Dollars in the foreign exchange market, which shifts the demand curve for U.S. Dollars rightward. On the other hand, there is no change in the demand for South Korean Won, so the demand curve for South Korean Won does not shift. Therefore, the best choice is A.

Hyundai Is a Large South Korean Company That Produces Finished