Holding all else constant, an increase in the real interest rate on U.S. assets will ________ the demand for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; increase
B. decrease; decrease
C. increase; decrease
D. decrease; increase
Answer: A
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Andrew's utility of wealth schedule is depicted in the above table. Andrew is offered a job as a cook which pays $10,000. He is also offered a job as a server which will pay $5,000 if tips are poor and $15,000 if tips are good
There is a 50 percent chance that tips will be poor and a 50 percent chance that tips will be good. Given the nature of Andrew's job offers and his utility of wealth schedule, Andrew will A) accept the offer to work as a server. B) accept the offer to work as a cook. C) be indifferent between working as a cook or a server. D) be unable to reach a decision about which offer to accept.
One disadvantage of a floating exchange rate system compared to a fixed or managed float exchange rate system is
A) it does not allow the exchange rate to reflect demand and supply in the market. B) it is difficult to maintain. C) it can worsen inflation if domestic prices of imports rise quickly. D) it eliminates the possibility of depreciation during a recession.
Total government revenues in the United States are about _____ percent of GDP
a. 25 b. 17 c. 45 d. 30
Self-indulgence and non-deferred gratification have convinced some that poor lack the desire and motivation to escape poverty
Indicate whether the statement is true or false