Suppose That the Interest Rate in Great Britain Increases, While

question 70

Multiple Choice

Suppose that the interest rate in Great Britain increases, while the interest rate in the United States remains constant.As a result,

• A) the demand curve for pounds decreases, and the pound depreciates against the dollar.
• B) the demand curve for pounds increases, and the pound depreciates against the dollar.
• C) the demand curve for pounds increases, and the pound appreciates against the dollar.
• D) the demand curve for pounds decreases, and the pound appreciates against the dollar.

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Definitions:

Private Ownership

The legal right of individuals or corporations to own property and assets, distinguishing from public or state ownership.

Allocation Mechanism

The process or system used to determine how resources are distributed and goods and services are allocated in an economy.

Incentive Function

A principle or mechanism designed to motivate individuals or entities to act in a desired manner by offering rewards or consequences.

Productive Resource

Any resource used in the creation of goods and services, including land, labor, and capital.