The demand for dollars in the foreign exchange market will increase (so that the demand curve shifts rightward) if
A) the U.S. interest rate differential falls.
B) the expected future exchange rate falls.
C) the exchange rate for the dollar falls.
D) None of the above answers is correct.
D
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Suppose we are plotting the relationship between the unemployment rate and the growth rate of real GDP
If the unemployment rate is measured along the vertical axis and the growth rate of real GDP is measured along the horizontal axis, we will get a(n) ________. A) downward sloping curve B) horizontal straight line C) vertical straight line D) upward sloping curve
Suppose the 12-month interest rate on a U.S. Treasury bill is 16 percent, and the one-year interest rate on a comparable British Treasury bill is 6 percent. The exchange rate today is $2.00 per pound. What must be the expected exchange rate at maturity for interest rate parity to hold?
a. $1.00 = 0.50 pound b. $1.00 = 0.75 pound c. 1 pound = $2.20 d. 1 pound = $1.80 e. 1 pound = $2.50
When rent controls establish a legal maximum rental rate below the equilibrium rental rate
A) quantity demanded exceeds quantity supplied. B) quantity supplied exceeds quantity demanded. C) demand exceeds supply. D) supply exceeds demand.
A good that has external benefits associated with its production will be
A. overproduced. B. underproduced. C. not produced. D. produced at the optimal level.