If the US Interest Rate Differential Falls, Then the Exchange Rate_{--------------------}

question 68

Multiple Choice

If the U.S. interest rate differential falls, then the exchange rate_{--------------------}

• A)does not change
• B)definitely falls
• C)definitely rises
• D)falls only if it was the U.S. interest rate that changed
• E)rises only if it was the foreign interest rate that changed

---

Definitions:

Sampling Bias

A distortion in the outcome of a study due to the method in which samples are collected, resulting in a non-representative sample of the population.

Response Set

A tendency in survey respondents to answer questions in a particular pattern, regardless of the content.

Halo Effect

A cognitive bias where perceptions of one quality lead to unjustified positive or negative assessments of other qualities.

Experimenter Bias

A bias where researchers' expectations influence the outcome of a study unintentionally.