If USSecurities Pay 6 Percent Interest, and If Great Britain's Securities

question 62

Multiple Choice

If U.S.securities pay 6 percent interest, and if Great Britain's securities pay 8 percent interest, then

• A)pounds depreciate relative to dollars.
• B)pounds appreciate relative to dollars.
• C)Great Britain's imports will fall.
• D)Great Britain's exports will rise.

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Definitions:

Capital Budgeting

Capital budgeting is the process by which a business evaluates and selects long-term investments based on their potential to generate profitable returns over time.

After Tax Cash Flow

The amount of cash that a business or individual has available after all tax obligations have been paid, indicating the net cash generated or used over a period.

Depreciated

The decrease in the value of an asset over time, often due to wear and tear or obsolescence.

Tax Rate

The percentage at which an individual or corporation is taxed, varying by income level, jurisdiction, and type of tax.