If Canadian Interest Rates Rise, the Exchange Rate Value of the Dollar

question 95

Multiple Choice

If Canadian interest rates rise, the exchange rate value of the dollar ________ and net exports ________.

• A)rises; increase
• B)rises; decrease
• C)falls; increase
• D)falls; decrease
• E)rises only if the U.S. interest rates fall concurrently; decrease

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Definitions:

Inventory

The total amount of goods and materials held by a business, intended for sale or used in production.

Inventory Investment

The purchase of goods and materials for future sale or use, regarded as a form of investment by a company.

GDP

Gross Domestic Product, which measures the total value of all goods and services produced within a country’s borders in a specific time period.

Partnership

A lawful business structure operated by two or more people who jointly manage and divide profits.