To an American,the demand curve for euros tells
A) that Americans do not want to purchase euros
B) how many euros Americans would want to buy in a given time period,at each different exchange rate
C) the real interest rate on foreign currency over time
D) how many Americans are willing to buy euros
E) how many euros have been purchased during a given time period

Question

Quizplus · Accepted Answer

The demand curve for euros shows the quantities of euros that Americans would want to buy at each different exchange rate. It does not indicate whether or not Americans want to purchase euros, but rather how much they would want to buy at different prices. Option C is incorrect because the demand curve does not necessarily indicate the real interest rate on foreign currency over time. Option D is incorrect because the demand curve does not tell us how many Americans are willing to buy euros, only the quantity demanded at different prices. Option E is incorrect because the demand curve only shows the quantities demanded at different prices, not the total amount purchased during a given time period.

To an American,the Demand Curve for Euros Tells