Under a Floating Exchange Rate Regime, Raising the Interest Rate

question 360

Multiple Choice

Under a floating exchange rate regime, raising the interest rate does NOT:

• A) increase foreign imports.
• B) reduce capital outflows.
• C) increase domestic investment spending.
• D) reduce domestic exports.

---

Definitions:

Martin Luther King Jr.

An influential American civil rights leader known for his nonviolent activism and his role in the American civil rights movement, promoting civil rights through peaceful protests.

Civil Rights Movement

The political, legal, and social struggle by black Americans to gain full citizenship rights and achieve racial equality, predominantly taking place in the mid-20th century.

Freedom

A state of being free; the power to act, speak, or think without externally imposed restraints.

Racial Segregation

A practice and policy of separating individuals on the basis of race, often resulting in unequal access to resources, services, and opportunities.