An Increase in the Interest Rate Should ________ the Demand

question 198

Multiple Choice

An increase in the interest rate should ________ the demand for dollars and the value of the dollar,and net exports should ________.

• A)decrease; decrease
• B)decrease; increase
• C)increase; decrease
• D)increase; increase
• E)increase; not change

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Definitions:

Diversification Objective

A strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.

Fluctuations In Income

Variations or changes in the amount of money received over a period, which can affect purchasing power and economic stability.

Earthquake Insurance

A type of property insurance policy that covers damage to buildings and personal property caused by seismic activities.

Utility Function

An equation that assigns a level of utility or satisfaction to each bundle of goods, allowing for comparisons of consumer preferences.