What are the two primary reasons for U.S.individuals and business firms to want foreign currency?

Question

Quizplus · Accepted Answer

The primary reasons for US individuals and business firms to want foreign currency are to purchase foreign goods, services, and investments. This is because the US economy is not self-sufficient and relies on imports for many goods and services. Additionally, investing in foreign currency or assets denominated in foreign currency can sometimes offer higher returns or diversify investment portfolios. However, while speculative trading in currency can occur, it is not a primary reason for wanting foreign currency. Hoarding currency for economic warfare is also not a relevant reason in this context.

What Are the Two Primary Reasons for U