As the Expected Future Exchange Rate for Dollars Increases

question 295

Multiple Choice

As the expected future exchange rate for dollars increases,

• A) the demand for U.S. dollars increases.
• B) the supply of U.S. dollars decreases.
• C) the U.S. interest rate will fall.
• D) Both answers A and B are correct.

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Definitions:

Withdrawals

Funds taken out of a business by its owners for personal use.

Expenses

Costs incurred by a business in the process of earning revenues.