French and German farmers wanting to buy equipment from an American manufacturer based in the U.S. will be: A) Demanding dollars

Question

3 years ago

10

French and German farmers wanting to buy equipment from an American manufacturer based in the U.S. will be: A) Demanding dollars

and also demanding euros in the foreign exchange market B) Supplying dollars and demanding euros in the foreign exchange market C) Supplying euros and demanding dollars in the foreign exchange market D) Supplying dollars and also supplying euros in the foreign exchange market

Business

1 answer:

shepuryov [24] · Answer 1 · 2022-10-05T10:27:30+03:00

Answer:

C) Supplying euros and demanding dollars in the foreign exchange market.

Explanation:

Foreign exchange market can be defined as type of market in which the currency of one country is converted into that of another country.

For example, the conversion of dollars of the United States of America can be converted into naira (Nigeria) at the foreign exchange market.

Hence, French and German farmers wanting to buy equipment from an American manufacturer based in the U.S. will be supplying euros and demanding dollars in the foreign exchange market because the medium of exchange (legal tender) in France and Germany is the "Euros" while it is "Dollars" in the United States of America.