Every transaction concerning the exportation of American goods constitutes a a. demand for foreign currency and a supply of dollars. b. demand for dollars, with no effect on markets for foreign currencies. c. supply of foreign currency, with no effect on the market for dollars. d. supply of foreign currency and demand for dollars.

Every transaction concerning the exportation of American goods constitutes a

a. demand for foreign currency and a supply of dollars.

b. demand for dollars, with no effect on markets for foreign currencies.

c. supply of foreign currency, with no effect on the market for dollars.

d. supply of foreign currency and demand for dollars.

 

answer:

(d) supply of foreign currency and demand for dollars.

As for purcahse of American goods, one needs dollars, hence, Every transaction concerning the exportation of American goods constitutes a demand for dollars, which is achieved by supply of foreign currency.

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