An Increase in the Foreign Interest Rate Shifts the Expected

question 11

Multiple Choice

An increase in the foreign interest rate shifts the expected return schedule for ________ deposits to the ________ and causes the domestic currency to depreciate.

• A) domestic; right
• B) domestic; left
• C) foreign; right
• D) foreign; left

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Definitions:

Objects

Material things that can be seen and touched, existing in physical reality.

Habituation

The method by which one becomes used to a stimulus through continuous exposure, resulting in a diminished reaction.

Stimulus

A stimulus is any event, object, or signal from the environment that elicits a sensory or behavioral response in an organism.

Responsiveness

The quality of reacting quickly and positively, or the degree to which a system or living organism responds to a stimulus or environment.