Under a System of Floating Exchange Rates,relatively High Productivity and Low

question 194

Multiple Choice

Under a system of floating exchange rates,relatively high productivity and low inflation rates in the United States result in:

• A) An increase in the demand for foreign currency,a decrease in the supply of foreign currency,and a depreciation in the dollar
• B) An increase in the demand for foreign currency,an increase in the supply of foreign currency,and an appreciation in the dollar
• C) A decrease in the demand for foreign currency,a decrease in the supply of foreign currency,and a depreciation in the dollar
• D) A decrease in the demand for foreign currency,an increase in the supply of foreign currency,and an appreciation in the dollar

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Definitions:

Payment Date

The specified date on which a payment, such as a dividend or bond interest, is made by a company to its shareholders or bondholders.

Negotiable

Something that can be discussed or altered in order to reach an agreement; in finance, refers to instruments like checks or bills of exchange that can be transferred to another party.

Optional Payment

A payment made by choice as opposed to requirement, often seen in loan agreements where the borrower may pay more than the minimum due.

Maturity Date

the specific date on which a financial instrument, such as a loan or bond, reaches its expiration and the principal is due to be repaid.