If US Inflation Suddenly Increased While European Inflation Stayed the Same

question 35

Multiple Choice

If U.S. inflation suddenly increased while European inflation stayed the same, there would be:

• A) an increased U.S. demand for euros and an increased supply of euros for sale.
• B) a decreased U.S. demand for euros and an increased supply of euros for sale.
• C) a decreased U.S. demand for euros and a decreased supply of euros for sale.
• D) an increased U.S. demand for euros and a decreased supply of euros for sale.

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Definitions:

Transformation

The process of change in form, appearance, nature, or character.

Convergence

The coming together of tectonic plates, often resulting in mountain building, earthquakes, and volcanic activity.

Divergence

The movement away from each other of tectonic plates at a divergent boundary, typically resulting in the formation of new crust.

Convergent Boundary

A tectonic boundary where two plates are moving towards each other, often resulting in mountain building, earthquakes, and volcanic activity.