If the USInterest Rate Rises Relative to the Foreign Interest Rate, Then

question 133

Multiple Choice

If the U.S.interest rate rises relative to the foreign interest rate, then in the foreign exchange market

• A) the demand for dollars increases, and the supply of dollars increases.
• B) the demand for dollars increases, and the supply of dollars decreases.
• C) the demand for dollars decreases, and the supply of dollars increases.
• D) the demand for dollars decreases, and the supply of dollars decreases.

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Definitions:

Tsunami

A series of ocean waves with extremely long wavelengths caused by large-scale disturbances such as underwater earthquakes, volcanic eruptions, or landslides.

Richter Magnitude

A scale historically used to quantify the size of earthquakes based on the amplitude of seismic waves, replaced by the more accurate moment magnitude scale for large events.

Nomograph

A type of graph used in seismology to determine the local magnitude of an earthquake.

S-Wave Amplitude

The measure of the height of the secondary or shear waves, which are one type of seismic wave produced by earthquakes.