Figure 11-4 -Refer to Figure 11-4.In Panel (B), Assume That the Price

question 169

Multiple Choice

Figure 11-4

-Refer to Figure 11-4.In Panel (b) , assume that the price of bonds rises from P₁ to P₂.Now, in Panel (c) , the higher price of bonds will _______ the demand for and _______ the supply of dollars and cause the exchange rate to ______.

• A)reduce; increase; increase
• B)increase; increase; fall
• C)increase; reduce; increase
• D)reduce; increase; fall

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