Hamsterville's currency is the snark and it has no restriction on the movement of financial assets in or out of the country.

All of the following increase the demand for the snark EXCEPT
Choose 1 answer:
(A) People in other countries want to buy more of Hamsterville's exports.
(B) Other countries buy less of Hamsterville's exports
(C) Real interest rates in Hamsterville increase
(D) Hamsterville's tourism increases.
(E) Other countries want to buy more financial assets in Hamsterville

Question

Hamsterville's currency is the snark and it has no restriction on the movement of financial assets in or out of the country.

All of the following increase the demand for the snark EXCEPT
Choose 1 answer:
(A) People in other countries want to buy more of Hamsterville's exports.
(B) Other countries buy less of Hamsterville's exports
(C) Real interest rates in Hamsterville increase
(D) Hamsterville's tourism increases.
(E) Other countries want to buy more financial assets in Hamsterville

Accepted Answer

***B*** ∻Key Concept∻ ⚹Demand for Currency⚹ ∻Explanation∻ ⚹Decreased exports imply that foreign countries are buying less of Hamsterville's goods, which would reduce the demand for the snark, as fewer foreign entities need the currency to pay for these goods.⚹◊How would a decrease in real interest rates in Hamsterville impact the demand for the snark currency in the foreign exchange market?⍭ Generate me a similar question◊

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