Use the Portfolio-Balance Approach to Answer This Question

question 35

Multiple Choice

Use the Portfolio-Balance Approach to answer this question.Other things remaining constant,if the supply of foreign bonds increases,what would happen to the domestic currency?

• A) The domestic currency would appreciate.
• B) The domestic currency would depreciate.
• C) The domestic currency would not change.
• D) The domestic currency would sharply depreciate and then appreciate later.

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Definitions:

Ethical Misconduct

Behavior by an individual or organization that violates accepted moral standards or principles.

Philanthropic

Relating to the desire to promote the welfare of others, usually expressed especially by the generous donation of money to good causes.

Event Outcome Forecasts

Predictions about the results or consequences of events in the future.