With flExible Exchange Rates, an Increase in U

question 279

Multiple Choice

With flexible exchange rates, an increase in U.S. interest rates can be expected to

• A) adversely affect U.S. exporters.
• B) encourage investment spending by U.S. firms.
• C) lower the foreign exchange value of the dollar.
• D) cause a net outflow of foreign capital from the United States.

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Definitions:

Pure Reactive Load

An electrical load that consumes reactive power only, with a power factor of zero, meaning it does not dissipate real power.

Three-Phase Load

An electrical load operating with three phases of alternating current, providing more consistent, balanced power delivery.

VARs

Volt-Ampere Reactive, a unit of reactive power in an AC electrical power system.

Three-Phase Connection

A method of electrical connection that uses three alternating currents of the same frequency and amplitude but with phases offset by one third of a cycle.