Foreign Exchange Market

Abigail is planning to study abroad and she needs to exchange her local currency for the currency of the country she's going to. She's wondering where she can do this. What is the market called where international currencies are bought and sold?

• Foreign exchange market: A market where international currencies are bought and sold

• A market where goods and services are traded between countries

• A market where labor and capital are exchanged

• A market where natural resources are bought and sold

Daniel, Mason, and Luna are studying economics. They are discussing what determines the exchange rate in the foreign exchange market. Daniel suggests it's the supply and demand for an international currency. What do you think?

• Supply and demand for an international currency

• Government regulations

• Trade balances between countries

• Interest rates in different countries

William is studying the foreign exchange market and notices that a particular currency is appreciating in value. What does this mean for that currency in the foreign exchange market?

• It becomes more expensive in the foreign exchange market

• It becomes less expensive in the foreign exchange market

• It has no impact on the foreign exchange market

• It leads to inflation in the domestic economy

Olivia is discussing with David and Daniel about the foreign exchange market. She asks, "What happens when a currency depreciates in value?"

• It becomes less expensive in the foreign exchange market

• It becomes more expensive in the foreign exchange market

• It has no impact on the foreign exchange market

• It leads to deflation in the domestic economy

Jackson, a business owner in the United States, wants to import goods from a supplier in Japan. Who makes up the demand for Japanese Yen in the foreign exchange market in this scenario?

• Importers like Jackson who need to convert their currency (USD) into the currency of the exporter (JPY)

• Exporters in Japan who need to convert their currency (JPY) into the currency of the importer (USD)

• Banks and financial institutions

• Government agencies

Isla wants to buy some foreign currency for her trip abroad. Who makes up the supply of a currency in the foreign exchange market that she can buy from?

• Currency suppliers such as banks and individuals

• Currency buyers like Henry who want to invest in foreign currencies

• Government agencies

• Importers or buyers like Benjamin who need to convert their currency into the currency of the exporter

Imagine Aria, Evelyn, and William are trading in the foreign exchange market. What happens if there is a rightward shift in the demand curve for the currency they are trading?

• The demand for the currency they are trading has increased

• The demand for the currency they are trading has decreased

• The supply of the currency they are trading has increased

• The supply of the currency they are trading has decreased

David, Kai, and Rohan are studying foreign exchange markets. They are discussing what would happen if there is a leftward shift of the foreign exchange demand curve. Can you help them understand?

• The demand for a currency has decreased

• The demand for a currency has increased

• The supply of a currency has decreased

• The supply of a currency has increased

Arjun is studying the global economy and he notices a rightward shift of the foreign exchange supply curve for the US Dollar. What does this imply?

• The supply of US Dollar has increased

• The supply of US Dollar has decreased

• The demand for US Dollar has increased

• The demand for US Dollar has decreased

Aria, Maya, and Ava are studying economics. They are discussing the impact of a leftward shift in the foreign exchange supply curve. According to their discussion, what happens when there is a leftward shift of the foreign exchange supply curve?

• The supply of a currency has decreased

• The supply of a currency has increased

• The demand for a currency has decreased

• The demand for a currency has increased