Who generates a supply of dollars in the foreign exchange market? U.S. residents who demand foreign...

  

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Who generates a supply of dollars in the foreign exchange market? U.S. residents who demand foreign goods, services, and assets. U.S. residents and firms who wish to sell domestic assets to foreigners. Foreign residents abroad who demand U.S. goods, services, and assets. Foreign banks and citizens who wish to increase their holdings of a reserve currency. Exhibit: Foreign Exchange Market Exchange rate D 0 Quantity of dollars per period Who generates a supply of dollars in the foreign exchange market? U.S. residents who demand foreign goods, services, and assets. U.S. residents and firms who wish to sell domestic assets to foreigners. Foreign residents abroad who demand U.S. goods, services, and assets. Foreign banks and citizens who wish to increase their holdings of a reserve currency. Exhibit: Foreign Exchange Market Exchange rate D 0 Quantity of dollars per period

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