Foreigners demand Australian dollars

Question

BlackTom AI · Accepted Answer

Foreigners need Australian dollars whenever they must make payments denominated in AUD—whether for goods, services, financial assets, or personal spending in Australia.

1) Relevant concepts
- Demand for a currency comes from foreigners who need that currency to pay domestic sellers or settle domestic financial transactions.
- International transactions (exports, asset purchases, tourism) typically require conversion into the seller’s currency at the foreign exchange market, increasing demand for that currency.

2) Step-by-step reasoning
- Option (a): When a foreign buyer purchases Australian goods or services (exports), the seller expects payment in AUD or an agreed convertible currency. The foreign buyer therefore exchanges their currency for AUD, creating demand for AUD.
- Option (b): When foreigners buy Australian bonds, equities or other financial assets, settlement generally requires AUD-denominated payment or local-currency settlement. Investors convert foreign currency into AUD to purchase and hold those assets, again increasing demand.
- Option (c): Tourists coming to Australia need AUD to pay local businesses (hotels, restaurants, transport). They exchange their home currency for AUD before or during their trip, creating additional demand.

3) Calculations
- No numerical calculation is required; the logic is qualitative: each activity requires conversion into AUD, so each creates demand.

4) Why the correct answer is correct
- Since each listed activity independently causes foreigners to convert to and therefore demand Australian dollars, the combined statement “All of the above” correctly captures all typical sources of foreign demand for AUD.

5) Why other options are incomplete
- Options (a), (b), and (c) are true individually but each omits other important reasons. Because the question asks when foreigners demand AUD and includes multiple valid reasons, selecting any single one is incomplete.

6) Conclusion
- Therefore the correct choice is (d) All of the above. This matches the provided answer.

Foreigners demand Australian dollars单项选择题

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