Assume a System of Floating Exchange Rates

question 42

Multiple Choice

Assume a system of floating exchange rates.In response to relatively high domestic interest rates,suppose that foreign investors place their funds in domestic capital markets.The result would be

• A) a depreciation of the domestic currency and a rise in net exports
• B) a depreciation of the domestic currency and a fall in net exports
• C) an appreciation of the domestic currency and a rise in net exports
• D) an appreciation of the domestic currency and a fall in net exports

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Definitions:

Hard Spots

Localized areas of abnormal hardness or stiffness in materials, often leading to uneven wear, damage, or failure in mechanical contexts.

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A precision measuring instrument designed specifically for measuring the inside diameter of brake drums using the metric system, ensuring accurate maintenance and repair.

Dial-indicator

A precision tool used to measure small distances or angles accurately, often in machining processes.