Use the Following to Answer Questions

question 282

Multiple Choice

Use the following to answer questions :
Scenario: Japan and the United States
Suppose that the interest rate in the United States is 4%, in Japan it is 7%, and financial assets in the two countries are equal in risk.
-(Scenario: Japan and the United States) Refer to the scenario Japan and the United States. Assuming that loans in India and the United States carry equal risk, this implies that:

• A)U.S. lenders will lend to borrowers in India.
• B)Indian lenders will lend to U.S. borrowers.
• C)the interest rate in India will increase further as compared to the U.S. interest rate.
• D)the central bank of India has adopted a more expansionary monetary policy.

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Definitions:

Chemical Elements

Substances that cannot be broken down into simpler substances by chemical means, and are defined by the number of protons in their atomic nuclei.

Reddish Streak

The color mark left by a mineral when it is dragged across an unglazed porcelain plate.

Hematite

An iron oxide mineral that is one of the main ores of iron, recognized by its reddish-brown color.

Magnetite

A naturally occurring magnetic mineral, consisting of iron oxide, often mined as an iron ore.