Answer to Question #134639 in Macroeconomics for tebogo

Question

Q.2.2 Identify any two reasons that US dollars would be demanded in South Africa.

Answer 1

why the US dollar would be demanded in South Africa are:

Importing goods from the US: If any one in south Africa wants to imports goods from the US, they will need to convert their own currency to Dollar as Dollar is the only acceptable currency in the US, so for every imports South Africa will need dollars.

People of South Africa visiting US, for example if the people of South AFrica wants to visit US for a vacation trip or a business trip or any other reason, they will need US currency as South African currency is not accepted in the US for transaction.