A Decline in the Domestic Real Interest Rate Would Cause

question 86

Multiple Choice

A decline in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate.

• A)rise; rise
• B)rise; fall
• C)fall; rise
• D)fall; fall

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Definitions:

Fixed Asset

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash within a year.

Useful Life

The period over which an asset is expected to be used by an entity, or its lifespan for accounting purposes.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Average Rate

A mean value calculated to represent the typical rate of something, such as interest, return, or speed, over a given period.