When entities purchase assets denominated in foreign currencies,those entities are:
A)decreasing the supply of the foreign currency because they are using the foreign currency to purchase the assets.
B)not affecting the supply of the foreign currency involved because there is a finite supply of any currency.
C)creating a supply of the foreign currency because they are paying for those purchases in the foreign currency.
D)not affecting the supply of foreign currency because the supply of a currency can only be changed by the central bank that controls the currency.

Question

Quizplus · Accepted Answer

When entities purchase assets denominated in foreign currencies, they are typically paying for those assets in the foreign currency, thus creating a supply of that currency in the market.

When Entities Purchase Assets Denominated in Foreign Currencies,those Entities Are