Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Which of the following is the source of demand for foreign exchange?

Options:

Direct purchases of goods and services by non -residents in the domestic market

Imports from other countries

Purchase of shares by foreigners from domestic companies

Exports from home country

Correct Answer:

Imports from other countries

Explanation:

Importers are required to purchase foreign exchange so that they can pay for the imports in the currency of the country from which they have brought the commodities.