An Increase in the Foreign Interest Rate Causes the Demand

question 16

Multiple Choice

An increase in the foreign interest rate causes the demand for domestic assets to ________ and the domestic currency to ________,everything else held constant.

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

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Definitions:

P < .05

A statistical notation indicating that the probability of the observed results occurring by chance is less than 5%.

Effect Size

A quantitative measure of the strength of a phenomenon, often used to determine the practical significance of research findings.

Cohen

Refers to statistical measures developed by Jacob Cohen to quantify the effect size or the strength of an observed phenomenon, such as Cohen's d.

Cohen's D

A gauge for quantifying the size of impact by showing the normalized discrepancy between two mean values.