An Explanation for the Depreciation of the Dollar Vis-à-Vis the Euro

question 125

Multiple Choice

An explanation for the depreciation of the dollar vis-à-vis the euro is that:

• A) incomes are higher in the euro area than in the United States.
• B) interest rates are higher in the United States than in the euro area.
• C) inflation in the United States is higher than in the euro area.
• D) there is less risk in the United States than in the euro area.
• E) None of these answers is correct.

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Definitions:

SEC

Securities and Exchange Commission, a U.S. government agency responsible for regulating the securities markets and protecting investors.

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry.

1933 Securities Act

A federal statute that requires securities sold in the U.S. to be registered and to disclose relevant financial information, aiming to protect investors from fraud.

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