If the US and Japan Engage in Substantial Financial Flows but Little

question 48

Multiple Choice

If the U.S. and Japan engage in substantial financial flows but little trade, ____ directly influences their exchange rate the most. If the U.S. and Switzerland engage in much trade but little financial flows, ____ directly influences their exchange rate the most.

• A) interest rate differentials; interest rate differentials
• B) inflation and interest rate differentials; interest rate differentials
• C) income and interest rate differentials; inflation differentials
• D) interest rate differentials; inflation and income differentials
• E) inflation and income differentials; interest rate differentials

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Definitions:

Broad

Wide in extent or scope; encompassing a large area or range.

Comprehensive

Thorough and complete in coverage or scope, addressing all necessary aspects of a topic or issue.

Longer-Term

Pertaining to an extended period, typically beyond five years, used especially in planning and forecasting future goals and strategies.

Control

The process of managing and directing activities in an organization to ensure that its goals are achieved efficiently and effectively.