A Rise in World Real Interest Rates Relative to U

question 91

Multiple Choice

A rise in world real interest rates relative to U.S. interest rates

• A)will have no effect on the demand for dollar-denominated assets because investors always prefer dollar-denominated assets.
• B)will have no effect on the demand for dollar-denominated assets but will cause a decrease in the demand for assets denominated in other currencies.
• C)will have no effect on the demand for dollar-denominated assets but will cause an increase in the demand for assets denominated in other currencies.
• D)will cause international investors to increase their demand for dollar-denominated assets.
• E)will cause international investors to decrease their demand for dollar-denominated assets.

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Definitions:

Reduction

The process of making something smaller or less in amount, size, or importance.

Emotional Outbursts

Sudden, intense expressions of emotion that may not be appropriate to the situation.

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A mental health disorder characterized by pervasive instability in moods, behavior, self-image, and functioning, often leading to impulsivity and troubled relationships.

Uncritically Accepted

Refers to ideas, beliefs, or statements accepted without questioning or critical examination.