As US Interest Rates Fall Relative to British Interest Rates

question 14

Multiple Choice

As U.S. interest rates fall relative to British interest rates:

• A) U.S. citizens holding dollars will be attracted into British securities market.
• B) the supply of pounds shifts to the right if British citizens buy bonds in the United States.
• C) British buyers must exchange pounds for dollars to buy bonds in Britain.
• D) the result will be a depreciated pound and a stronger dollar.

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