If the US Interest Rate Rises While Interest Rates in the Rest

question 144

Multiple Choice

If the U.S. interest rate rises while interest rates in the rest of the world do not change, the higher U.S. interest rate

• A) decreases the demand for dollars.
• B) increases the demand for dollars.
• C) has no effect on the demand for dollars.
• D) will stop all trading between the currencies of the U.S. and other countries.

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Definitions:

Producers

Individuals or businesses engaged in the creation of goods or services, aiming to sell them for a profit.

Tax Per Unit

A fixed amount of tax imposed on a product or service, regardless of its price.

Excise Tax

A tax applied to specific goods, services, or transactions, usually with the intent of discouraging their use or generating revenue.

Tax Per Unit

A specific tax levied on a product based on the number of units purchased, not the value of the purchase.