If a Country Experiences an Increase in Interest Rates Relative

question 25

Multiple Choice

If a country experiences an increase in interest rates relative to U.S. interest rates, the inflow of U.S. funds to purchase its securities should ____, the outflow of its funds to purchase U.S. securities should ____, and there is ____ pressure on its currency's equilibrium value.​

• A) ​increase; decrease; downward
• B) ​decrease; increase; upward
• C) ​increase; decrease; upward
• D) ​decrease; increase; downward
• E) ​increase; increase; upward

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Definitions:

Merchandise Purchased

Goods bought by a business for the purpose of resale, forming part of its inventory.

Cost Of Goods Available

The total cost of all merchandise or materials available for sale or use, including beginning inventory plus purchases.

Purchase Returns

Goods returned by the buyer to the supplier due to defects, inaccuracies in shipment, or other discrepancies.

Allowances

A deduction from the gross amount on an invoice by the buyer for goods purchased or to cover some type of shortcoming.