When an Increase in Domestic Interest Rates Causes the Dollar

question 19

Multiple Choice

When an increase in domestic interest rates causes the dollar to appreciate, which of the following is false?

• A)The dollar price of foreign goods falls.
• B)Net exports will fall.
• C)The increase in domestic interest rates could cause a reduction in domestic demand.
• D)The reduction in aggregate demand increases the demand for imports.

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Definitions:

Whole-Lot Quantities

The complete amount of goods considered as a single unit for manufacturing, ordering, or selling purposes.

Quick Response Systems

Technology-driven systems designed to improve the efficiency of information flow and material handling, thereby speeding up transactions and responsiveness in the supply chain.

Marketing Channel

A set of practices or activities necessary to transfer the ownership of goods from the point of production to the point of consumption, including the distribution and selling processes.

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products, typically known as the 4Ps: Product, Price, Place, and Promotion.