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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Definitions:

Ownership

The legal right or status of having control over property, resources, or assets.

Wheat

A cereal grain that is a staple food used to make flour for bread, pasta, pastry, and other food products.

Employees

Individuals who are hired by a business or organization to perform specific duties in exchange for compensation such as wages, salary, or other benefits.

Agents

Representatives authorized to act on behalf of another person or entity, often in business or legal matters.