Foreign exchange markets work most efficiently when:
A)they are closely regulated so that speculation is limited.
B)MNCs have difficulty borrowing money domestically.
C)there are market makers who are willing to buy or sell currencies and,therefore,provide liquidity in the market.
D)when the volume of international transactions is high and the demand for foreign currency is increasing.

Question

Quizplus · Accepted Answer

Market makers are essential in providing liquidity in the foreign exchange market. They create a market for the currencies by buying and selling them, ensuring that there are always buyers and sellers available. This makes it easier for individuals and businesses to buy and sell currencies at will, leading to a more efficient market. The other options do not contribute to the efficiency of the foreign exchange market.

Foreign Exchange Markets Work Most Efficiently When