Other Things the Same,if the Price Level Falls,domestic Interest Rates

question 131

Multiple Choice

Other things the same,if the price level falls,domestic interest rates

• A)rise,so domestic residents will want to hold more foreign bonds.
• B)rise,so domestic residents will want to hold fewer foreign bonds.
• C)fall,so domestic residents will want to hold more foreign bonds.
• D)fall,so domestic residents will want to hold fewer foreign bonds.

---

Definitions:

Trade Barriers

Restrictions set by a government to control international trade, often to protect domestic industries.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess the relative value of the currencies.

Corn Price

The market value at which corn, a major agricultural commodity, is traded.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.