Other Things the Same, Which of the Following Would Cause

question 90

Multiple Choice

Other things the same, which of the following would cause the real exchange rate to rise?

• A)Both an increase in the real interest rate and an increase in foreign demand for U.S.goods and services.
• B)An increase in the real interest rate, but not an increase in foreign demand for U.S.goods and services.
• C)An increase in foreign demand for U.S.goods and service, but not an increase in the U.S.real interest rate.
• D)Neither an increase in the U.S.real interest rate nor an increase in the demand for U.S.goods and services.

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