QuestionMay 23, 2025

When the United States imports goods and services from France, what happens in the market for Dollars? What happens in the market for Euros? In the market for Dollars: A. the Demand for Dollars decreases B. the Demandifor Dollars increases C. the Demand for Dollars does not change A. the Supply of Dollars decreases B. the Supply of Dollars increases C. the Supply of Dollars does not change In the market for Euros: A. the Demand for Euros decreases B. the Demand for Euros increases C. the Demand for Euros does not change A. the Supply of Euros decreases B. the Supply of Euros increases C. the Supply of Euros does not change

When the United States imports goods and services from France, what happens in the market for Dollars? What happens in the market for Euros? In the market for Dollars: A. the Demand for Dollars decreases B. the Demandifor Dollars increases C. the Demand for Dollars does not change A. the Supply of Dollars decreases B. the Supply of Dollars increases C. the Supply of Dollars does not change In the market for Euros: A. the Demand for Euros decreases B. the Demand for Euros increases C. the Demand for Euros does not change A. the Supply of Euros decreases B. the Supply of Euros increases C. the Supply of Euros does not change
When the United States imports goods and services from France, what happens in the market for Dollars? What happens in the market for Euros?
In the market for Dollars:
A. the Demand for Dollars decreases
B. the Demandifor Dollars increases
C. the Demand for Dollars does not change
A. the Supply of Dollars decreases
B. the Supply of Dollars increases
C. the Supply of Dollars does not change
In the market for Euros:
A. the Demand for Euros decreases
B. the Demand for Euros increases
C. the Demand for Euros does not change
A. the Supply of Euros decreases
B. the Supply of Euros increases
C. the Supply of Euros does not change

Solution
4.5(278 votes)

Answer

In the market for Dollars: B. the Supply of Dollars increases; In the market for Euros: B. the Demand for Euros increases. Explanation 1. Analyze the Market for Dollars When the U.S. imports goods from France, Americans need Euros to pay for these goods. Therefore, they exchange Dollars for Euros, **increasing the Supply of Dollars** in the foreign exchange market. 2. Analyze the Market for Euros As Americans demand more Euros to purchase French goods, the **Demand for Euros increases** in the foreign exchange market.

Explanation

1. Analyze the Market for Dollars<br /> When the U.S. imports goods from France, Americans need Euros to pay for these goods. Therefore, they exchange Dollars for Euros, **increasing the Supply of Dollars** in the foreign exchange market.<br /><br />2. Analyze the Market for Euros<br /> As Americans demand more Euros to purchase French goods, the **Demand for Euros increases** in the foreign exchange market.
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