A Decrease in the United States Interest Rate Relative to the Japanese

question 1

Multiple Choice

A decrease in the United States interest rate relative to the Japanese interest rate will cause the exchange rate, measured in yen per dollar, to ____ as international investors ____ their demand for dollar-denominated assets.

• A)rise; increase
• B)fall; increase
• C)rise; decrease
• D)None of these are correct because only the government can change the exchange rate.
• E)fall; decrease

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Definitions:

Cash Flows

The inflows and outflows of cash and cash equivalents, representing the operational, investing, and financing activities of a business.

Year Ended

Refers to the end of a 12-month financial accounting period or fiscal year for an organization.

Mass Media

Channels of communication, such as television, newspapers, and the internet, that reach a large audience simultaneously.

Functionalists

Theorists who view society as a complex system whose parts work together to promote solidarity and stability.