An Increase in the Real Interest Rate on U

question 57

Multiple Choice

An increase in the real interest rate on U.S. bonds, everything else equal, will have the following impact on the foreign exchange market:

• A) the demand for dollars will decrease.
• B) the supply of dollars will increase.
• C) the dollar will depreciate relative to foreign currencies.
• D) the demand for dollars will increase.

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Definitions:

Official Statistics

Official statistics are data collected and published by government agencies or other authorized organizations, often used for policy making and research.

Widowed Persons

Individuals who have lost their spouse through death and have not remarried.

Sacred

Regarding something as holy, divine, or deserving veneration, often in a religious or spiritual context.

God-given Trust

A belief or notion that certain responsibilities or duties are divinely bestowed upon an individual or group.