An Increase in the Real Interest Rate Outside of Canada

question 26

Multiple Choice

An increase in the real interest rate outside of Canada will cause the dollar to ________ relative to other currencies and ________ net exports and real GDP.

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

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Definitions:

Workers' Compensation

Insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Gross Payroll

Gross payroll represents the total amount of money a business owes to its employees before any deductions, such as taxes and other withholdings, are made.

Injury

Physical harm or damage to a person's body, often resulting from accidents or violence.

FICA-OASDI

The Social Security portion of the Federal Insurance Contributions Act tax, used to fund the Social Security program in the United States.