The correct answer is Option (4) → (A) and (D) only
The demand for foreign exchange arises when foreign currency is needed to make payments for goods, services, or assets purchased from other countries.
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(A) Import of visibles: When a country imports goods (visibles) from another country, the domestic importers need to pay the foreign exporters in their currency or a mutually agreed foreign currency. This increases the demand for foreign exchange. (Correct)
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(B) Export of invisibles: When a country exports services (invisibles), such as tourism, software services, or shipping, foreign residents pay the domestic country in foreign currency. This leads to an inflow of foreign exchange, thus increasing the supply of foreign exchange, not the demand for it. (Incorrect)
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(C) Remittances by residents working abroad: When residents of a country work abroad and send money back to their home country, they are sending foreign currency into the domestic economy. This is an inflow of foreign exchange, thus increasing the supply of foreign exchange, not the demand for it. (Incorrect)
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(D) Purchase of assets abroad: When domestic residents or firms purchase assets (like land, stocks, bonds, or factories) in foreign countries, they need to pay for these assets in foreign currency. This increases the demand for foreign exchange. (Correct)
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