If Interest Rates Fall in the United States Relative to the Rest

question 61

Multiple Choice

If interest rates fall in the United States relative to the rest of the world,the demand for U.S.dollars will ________ because there is lesser demand for assets with ________ returns.

• A) decrease; higher
• B) decrease; lower
• C) increase; higher
• D) increase; lower
• E) increase; diminishing marginal

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Definitions:

Factor Of Production

An input used in the production of goods or services in order to make an economic profit. The primary factors include land, labor, capital, and entrepreneurship.

Marginal Revenue Product

The increased earnings resulting from the utilization of one more unit of an input or resource in production.

Market Wage

The prevailing pay rate for work of a specific nature in a particular geographic area, determined by the supply and demand for labor.

Residential Use

The utilization of property or land for living purposes, such as houses or apartments, as opposed to commercial or industrial use.