Question

Which group would supply dollars in the foreign exchange market?

I. Americans who want to buy U.S. goods, services, and assets
II. Americans who want to buy European goods, services, and assets
III. Europeans who want to buy U.S. goods, services, and assets

Answer 1

The correct answer is 3

Step-by-step explanation:

If Americans who want to buy or purchase the US goods, assets and services, which means that there will not be any foreign exchange market is required. Americans who would like to buy or purchase the European goods, they will demand Euros and this will not lead to supply of dollars.

So, European who want to purchase the US services, assets and goods will demon dollars and will lead to supply dollars.

Therefore, the 3 is the correct answer.