An Increase in the Real Rate of Interest That Can

question 121

Multiple Choice

An increase in the real rate of interest that can be earned on U.S. investments above the rate that can be earned on investments in India would:

• A) increase the price of the dollar in Indian rupees.
• B) increase the supply of dollars by those holding U.S. dollars.
• C) decrease the equilibrium exchange rate of Indian rupees per dollar.
• D) all of these.

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