Question

For each of the following, is it part of demand for yen or supply of yen in the foreign exchange market? a. A Japanese firm sells its U.S. government securities to obtain funds to buy real estate in Japan. b. A U.S. import company pays for glassware purchased from a small Japanese producer. c. A U.S. farm cooperative receives payment from a Japanese importer of U.S. oranges. d. A U.S. pension fund uses some incoming contributions to buy equity shares of several Japanese companies through the Tokyo stock exchange.

Answer 1

Answer:

a. A Japanese firm sells its U.S. government securities to obtain funds to buy real estate in Japan.

This contributes to the demand for yen

b. A U.S. import company pays for glassware purchased from a small Japanese producer.

This contributes to the demand for yen

c. A U.S. farm cooperative receives payment from a Japanese importer of U.S. oranges.

This contributes to the supply of yen for foreign exchange

d. A U.S. pension fund uses some incoming contributions to buy equity shares of several Japanese companies through the Tokyo stock exchange.

This contributes to the demand for yen

Explanation: