If USInterest Rates Rise While Foreign Interest Rates Remain Unchanged

question 77

Multiple Choice

If U.S.interest rates rise while foreign interest rates remain unchanged,

• A)GDP will not change since the shift in aggregate supply cancels the positive effects on aggregate demand.
• B)the dollar will depreciate and thus reduce prices and output.
• C)foreign capital will be attracted to the United States and the dollar will appreciate.
• D)net exports will increase and the economy will expand.

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Definitions:

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Democratic Society

A society in which the principles of democracy, such as voting rights, freedom of expression, and equality before the law, are practiced and upheld.

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An individual enslaved person who actively resists and protests against their enslavement, often through acts of rebellion or escape.