If U.S. securities pay 6 percent interest, and if Great Britain’s securities pay 8 percent interest, then
A. pounds depreciate relative to dollars.
B. pounds appreciate relative to dollars.
C. Great Britain’s imports will fall.
D. Great Britain’s exports will rise.
Answer: B
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The theory of comparative advantage suggests that a (an)
A natural monopoly has
A. many producers of the same product. B. easy access to the market. C. a single firm providing the industry's output. D. one buyer of output.
The theory of rational expectations states that
a. expected inflation will be no different from actual inflation, on average. b. expectations are based on all possible information. c. individuals always act optimally. d. expected inflation will be lower than actual inflation.
A firm's demand curve for labor coincides with the:
a. marginal cost curve. b. average cost curve. c. marginal revenue curve. d. marginal revenue product curve.