If a Country Experiences an Increase in Interest Rates Relative

question 8

Multiple Choice

If a country experiences an increase in interest rates relative to U.S. interest rates, the inflow of U.S. funds to purchase its securities should ____, the outflow of its funds to purchase U.S. securities should ____, and there is ____ pressure on its currency's equilibrium value.

• A) increase; decrease; downward
• B) decrease; increase; upward
• C) increase; decrease; upward
• D) decrease; increase; downward
• E) increase; increase; upward

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