Higher US Interest Rates Cause the Value of the Dollar to to

question 79

Multiple Choice

Higher U.S. interest rates cause the value of the dollar to

• A) rise, making U.S. goods relatively cheaper on world markets.
• B) rise, making U.S. goods relatively more expensive on world markets.
• C) fall, making U.S. goods relatively cheaper on world markets.
• D) fall, making U.S. goods relatively more expensive on world markets.

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Definitions:

Collection Time

The typical duration required for a company to collect payments due from its clients.

Amounts

Amounts refer to the quantities or sums of money involved in financial transactions or measurements.

Net Present Value

A calculation that compares the value of money now with the value of that money in the future, accounting for inflation and returns.

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, involving the collection and processing of cheque payments at a secure location.