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:

Unsatisfied Demand

A situation where the quantity demanded of a product or service exceeds the quantity supplied at a given price.

Selling Division

A specific segment of a company focused on sales activities, including marketing and distributing products to customers.

Joint Cost

Costs that are incurred in the process of producing two or more products simultaneously and cannot be easily attributed to individual products.

Value Basis

A method for calculating the cost of an investment, typically used to determine the gain or loss on the sale or disposition of the asset.