With Everything Else the Same, in the Foreign Exchange Market

question 133

Multiple Choice

With everything else the same, in the foreign exchange market which of the following increases the supply of Australian dollars?
I. A fall in the Australian interest rate
II. A fall in interest rates in foreign countries
III. A rise in the expected future exchange rate

• A)I only
• B)I and II only
• C)I and III only
• D)I, II and III

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Definitions:

Multiple Correlation

A statistical technique that measures the strength of the relationship between one dependent variable and two or more independent variables.

Independent Variables

are the factors in an experiment that are deliberately manipulated or varied by the researcher to examine their effect on dependent variables.

Accuracy of Prediction

The degree to which a prediction matches the actual outcomes.

Criterion Variable

The dependent variable in a study or analysis that the independent variables aim to predict.