If Foreign Interest Rates Are High Relative to Those in the U.S

question 106

Multiple Choice

If foreign interest rates are high relative to those in the U.S. demand for dollars will:

• A) decrease as investors sell their dollars to buy foreign currency for investment abroad.
• B) increase as investors sell their currency to buy dollars for investment.
• C) decrease as investors sell their currency to buy dollars for investment.
• D) increase as investors sell their dollars to buy foreign currency for investment.

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Definitions:

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