If the U.S. interest rate is 5% and the interest rate in Germany is 2%, and the euro is expected to appreciate by 2% over the next year, then investors would:

a. sell dollars in the spot market.
b. buy euros.
c. seek to invest in the United States.
d. seek to invest in Germany.


Answer: c. seek to invest in the United States.

Economics

You might also like to view...

If the propensity to hold money is 6 and the money supply is 12, then the classical aggregate demand curve is

a. P = 2Y b. P/Y = 48 c. P = 1/(2Y) d. P = 2/Y

Economics

If total production of goods and services for a given quarter is $2,000 billion (seasonally adjusted), the GDP will be reported at an annual rate of

a. $750 billion. b. $1,500 billion. c. $5,000 billion. d. $8,000 billion.

Economics

During World War II,

a. government purchases of goods and services increased fivefold. b. the economy's production increased about 25 percent. c. unemployment fell to about 5%. d. All of the above are correct.

Economics

In the above figure, marginal cost and marginal revenue are equal at output

A. Q1. B. Q5. C. Q3. D. Q2.

Economics