If the Demand for U

question 117

Multiple Choice

If the demand for U.S. dollars goes up, the exchange rate will.

• A) increase and, as a result, net exports in the United States will decrease.
• B) decrease and, as a result, net exports in the United States will increase.
• C) increase and, as a result, net exports in the United States will increase.
• D) decrease and, as a result, net exports in the United States will decrease.

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Definitions:

Year

A period of time consisting of 12 months or 365 days, used as a basic unit of time to calculate longer or shorter periods.

Hyperinflation

An extremely rapid and out of control inflation rate where prices increase exponentially over a short period, severely eroding the real value of money.

Creeping Inflation

A situation in which the inflation rate is low and increases slowly over a period of time.

World War I

A global conflict that lasted from 1914 to 1918, involving many of the world's great powers, marked by military stalemates and massive casualties.