2. Introduction to the foreign-currency exchange market In an open economy, what is the source of...
2. Introduction to the foreign-currency exchange market
In an open economy, what is the source of supply in the foreign-currency exchange market?
Net exports
Exports
Net capital outflow
Investment and net capital outflow
Homework Answers
In an open economy, the source of supply in the foreign currency exchange market is net capital outflow.
Net capital outflow is the net flow of investments done by a country abroad during a year. When a country invests more outside then it is acting as a source of supply in the foreign exchange market.
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2. Introduction to the foreign-currency exchange market
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