Suppose the Interest Rate in England Is 5% and the Interest

question 181

Multiple Choice

Suppose the interest rate in England is 5% and the interest rate in France is 7%.If the euro is expected to depreciate by 3% against the British pound:

• A) because the euro-pound exchange rate will change,people will invest in other countries,such as the United States.
• B) there will be no flow of funds from England to France because of the exchange rate uncertainty.
• C) funds will flow from England to France.
• D) funds will flow from France to England.

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Definitions:

EEG Activity

The recording of electrical activity along the scalp produced by the firing of neurons within the brain, often used in neurological diagnosis.

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Delta waves, which are associated with the deepest stages of sleep and unconsciousness.

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The underlying principles or reasons for traits, behaviors, or phenomena as explained by the process of natural selection and evolutionary history.

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