The USinterest Rate Minus the Foreign Interest Rate Is Called the the U.S.interest

question 72

Multiple Choice

The U.S.interest rate minus the foreign interest rate is called the U.S.interest rate differential.The U.S.interest rate differential would increase if

• A) the U.S. interest rate decreases, and the foreign interest rate remains constant.
• B) the U.S. interest rate decreases, and the foreign interest rate increases.
• C) the U.S. interest rate increases, and the foreign interest rate increases.
• D) the U.S. interest rate increases, and the foreign interest rate decreases.

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Definitions:

Interest Rate

The charge, delineated as a percentage of the initial amount, that a lender requires from a borrower for the utilization of assets.

One-sample Chi-square

A statistical test used to determine if a sample data matches a population with a specific distribution.

Goodness-of-fit Test

A statistical test used to determine how well observed data match the expected distribution or model.

Test of Independence

A statistical method used to determine whether two categorical variables are independent of each other.