All Else Being Equal,an Increase in the Desirable Characteristics of U.S.financial

question 80

Multiple Choice

All else being equal,an increase in the desirable characteristics of U.S.financial securities causes the demand for dollars to ________ and the dollar will ________ relative to foreign currencies.

• A) increase; appreciate
• B) increase; depreciate
• C) decrease; appreciate
• D) decrease; depreciate

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Definitions:

Money Market

Includes short-term, highly liquid, and relatively low-risk debt instruments.

Real Estate Investment Trusts

Companies that own, operate, or finance income-producing real estate, providing investors with an opportunity to invest in large-scale, diversified portfolios of real estate.

Repurchase Agreements

Short-term loans involving the sale of securities with an agreement to repurchase them at a set price on a future date.

Federal Funds Rate

The interest rate at which banks lend reserve balances to other depository institutions overnight, influenced by the Federal Reserve.