-Which of the Following Would Best Explain the Decrease in the Supply

question 1

Multiple Choice

-Which of the following would best explain the decrease in the supply of dollars illustrated in Figure ?

• A)An increase in U.S. prices, ceteris paribus
• B)An increase in U.S. interest rates, ceteris paribus
• C)An increase in U.S. incomes, ceteris paribus
• D)An increase in foreign incomes, ceteris paribus

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Definitions:

U.S. Dollars

The United States' official medium of exchange, frequently employed as a standard in worldwide financial dealings.

Spot Market

An open financial market where commodities or financial instruments are exchanged and delivered right away.

Discount

To calculate the present value of some future amount.

Future

A standardized legal contract to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.