The currency of Hamsterville is the Hamsterville Snark $(S N)$.
If citizens of Hamsterville want to buy U.S. goods, what happens in the market for the Snark and in the market for the U.S. dollar?

Choose 1 answer:
(A) Hamsterville supply snarks in the market for snarks; the United States demands dollars in the market for U.S. dollars
(B) No impact on the market for snarks; Hamsterville demands U.S. dollars in the market for dollars
(C) Hamsterville demands snarks in the market for snarks; Hamsterville supplies dollars in the market for dollars
(D) No impact on the market for snarks; the United States supplies and demands dollars in the market for dollars
(E) Hamsterville supplies snarks in the market for snarks; Hamsterville demands dollars in the market for dollars

Question

The currency of Hamsterville is the Hamsterville Snark $(S N)$.
If citizens of Hamsterville want to buy U.S. goods, what happens in the market for the Snark and in the market for the U.S. dollar?

Choose 1 answer:
(A) Hamsterville supply snarks in the market for snarks; the United States demands dollars in the market for U.S. dollars
(B) No impact on the market for snarks; Hamsterville demands U.S. dollars in the market for dollars
(C) Hamsterville demands snarks in the market for snarks; Hamsterville supplies dollars in the market for dollars
(D) No impact on the market for snarks; the United States supplies and demands dollars in the market for dollars
(E) Hamsterville supplies snarks in the market for snarks; Hamsterville demands dollars in the market for dollars

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ Understand the economic principle that when citizens of a country want to buy foreign goods, they must exchange their domestic currency for the foreign currency. ‖ ‖ step 2 ⋮ Recognize that Hamsterville citizens wanting to buy U.S. goods will supply Snarks (SN) in exchange for U.S. dollars, increasing the supply of Snarks in the market for Snarks. ‖ ‖ step 3 ⋮ Acknowledge that Hamsterville citizens will demand U.S. dollars in the market for dollars to purchase U.S. goods, increasing the demand for U.S. dollars. ‖ ‖ step 4 ⋮ Match the outcomes of increased supply of Snarks and increased demand for U.S. dollars with the given answer choices. ‖ ∻Answer∻ ***E*** ∻Key Concept∻ ⚹Currency exchange in international trade⚹ ∻Explanation∻ ⚹When citizens of one country want to buy goods from another country, they must supply their own currency and demand the foreign currency, affecting the supply and demand in both currency markets.⚹◊What is the probability that citizens of Hamsterville will want to buy U.S. goods based on the information provided by the OCR model?⍭ Generate me a similar question◊

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