An Increase in the Domestic Interest Rate Causes the Demand

question 89

Multiple Choice

An increase in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to ________,everything else held constant.

• A)increase;appreciate
• B)increase;depreciate
• C)decrease;appreciate
• D)decrease;depreciate

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Definitions:

Accounts Payable

Liabilities owed by a company to its suppliers or creditors for goods or services purchased on credit.

Note Receivable

A promissory note from the payee’s point of view.

Promissory Note

A written promise to pay a specified amount of money, usually with interest, at a determined future date.

Payee

The person or company to whom the check is payable.