Question

Which of the following generates a demand for U.S. dollars in the currency market? An American citizen buys Japanese Yen for her trip to Japan. Japanese tourists shop in Barney’s of New York A Japanese businesswoman sells her U.S. government bonds. A restaurant in Kansas imports Kobe beef from Japan. Previous Next

Answer 1

Answer:

The correct answer is b. When japanese tourists shop in New York.

Explanation:

If an American citizen buys Japanese yens he is creating demand for Yens.

When japanese tourists go to shop in New York, they will need US dollars to make payments. They need to exchange their Japanese yens for US dollars.

The purchase of beef from Japan needs to be paid in Yens, so it will create demand for Yens.

So they will supply Yens and generate a demand for US dollars.

Thus, the correct answer is option B.