When Americans and Foreigners Expect the Return on Dollar Deposits

question 8

Multiple Choice

When Americans and foreigners expect the return on dollar deposits to be high relative to the return on foreign deposits,there is a ________ demand for dollar deposits and a correspondingly ________ demand for foreign deposits.

• A) higher; higher
• B) higher; lower
• C) lower; higher
• D) lower; lower

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Definitions:

Economic Growth

An increase in a country's output of goods and services over time, typically measured by changes in real GDP, indicating improvements in living standards and economic health.

Capital

Assets or resources that are available for use in the production of further assets or goods.

Entrepreneurial Ability

The skill or capacity to identify opportunities, create new businesses, and innovate new products or services in the marketplace.

Opportunity Cost

represents the value of the next best alternative forgone as a result of making a decision.