Which of the Following Is Most Likely to Happen as the Result

question 26

Multiple Choice

Which of the following is most likely to happen as the result of lower real interest rates in the United States?

• A) the dollar will depreciate on the foreign exchange market and imports will grow relative to exports.
• B) the dollar will appreciate on the foreign exchange market, and exports will grow relative to imports.
• C) the dollar will depreciate on the foreign exchange market, and exports will grow relative to imports.
• D) the dollar will appreciate on the foreign exchange market, and imports will grow relative to exports.

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Definitions:

Reprisals

Acts of retaliation, often within the context of international relations, military actions, or diplomatic disputes.

East India Company

A historic English company formed for the exploitation of trade with East and Southeast Asia and India, incorporated by royal charter in 1600.

Commerce

The activity of buying and selling, especially on a large scale.

Revolutionary War

The conflict between the Thirteen American colonies and British monarchy from 1775 to 1783, which resulted in the founding of the United States of America.