If Interest Rates in the United States Rise

question 244

Multiple Choice

If interest rates in the United States rise

• A)the value of the dollar will fall as foreign investors sell their U.S.investments.
• B)the value of the dollar will rise as the foreign investors increase their holdings of U.S.investments.
• C)the value of the dollar will fall as foreign investors increase their holdings of U.S.investments.
• D)the value of the dollar will rise as foreign investors sell their U.S.investments.

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Definitions:

Supply-Siders

Advocates of the economic theory that reducing tax rates and regulatory barriers to production lead to an increase in supply of goods and services, driving economic growth.

Tax Rates

The percentages at which income, purchases, or other financial transactions are taxed by governments.

Saving

Disposable income not spent for consumer goods; equal to disposable income minus personal consumption expenditures.

Deregulation

The process of reducing or eliminating government power in a particular industry, usually to create more competition within the industry.