To Temporarily Offset a Depreciation in the Dollar's Exchange Value,the

question 35

Multiple Choice

To temporarily offset a depreciation in the dollar's exchange value,the Federal Reserve could ____ the U.S.money supply which would promote a (an) ____ in U.S.interest rates and a (an) ____ in investment flows to the United States.

• A) Increase,decrease,decrease
• B) Increase,increase,increase
• C) Decrease,decrease,increase
• D) Decrease,increase,increase

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Definitions:

Technological Advance

Improvements in technology that increase productivity and lead to new products or more efficient processes.

R&D Spending

The amount of financial resources allocated by organizations on research and development activities aimed at creating new products or improving existing ones.

Interest-Rate Cost

The cost incurred by an individual or entity due to borrowing funds, determined by the rate of interest on the borrowed amount.

Marginal Utility

The additional enjoyment or gain achieved by consuming another unit of a good or service.