If the USInterest Rate Falls Relative to the British Interest Rate

question 1

Multiple Choice

If the U.S.interest rate falls relative to the British interest rate,

• A) the U.S.demand for pounds will not change
• B) the U.S.demand for pounds will decrease
• C) the U.S.demand for pounds will increase
• D) there will be a rightward movement along the U.S.demand curve for pounds
• E) there will be a leftward movement along the U.S.demand curve for pounds

---

Definitions:

Short Sale

A financial transaction where an investor sells borrowed securities, anticipating a price decline to buy them back at a lower price.

Mortgage Loan

is a type of loan used to purchase or maintain a home, land, or other types of real estate where the borrower agrees to pay back the lender over a period of time, typically through monthly payments.

Market Value

The current price at which an asset or service can be bought or sold in a fair and open market.

Right To Foreclose

The legal right of a lender or mortgage holder to seize property in the event of nonpayment of debt.