If foreign interest rates rise

a. The demand for US dollars rises, causing it to appreciate

b. The demand for US dollars falls, causing it to depreciate

c. The demand for US dollars rises, causing it to depreciate

d. The demand for US dollars falls, causing it to appreciate

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chocolatetortoise432Lv1

2 Jun 2021

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Related questions

The Mexican demand for American goods leads to:

a. the demand for Mexican pesos and the supply of US dollars on the foreign exchange market.
b. the demand for US dollars and the demand for Mexican pesos on the foreign exchange market.
c. the demand for US dollars and the supply of Mexican pesos on the foreign exchange market.
d. the demand for US dollars and the supply of US dollars on the foreign exchange market.

byzantiumsalmon746

Contractionary monetary policy:

	a.	lowers interest rates, causing aggregate demand to shift to the left.
	b.	lowers interest rates, causing aggregate demand to shift to the right.
	c.	raises interest rates, causing aggregate demand to shift to the left.
	d.	raises interest rates, causing aggregate demand to shift to the right.
	e.	lowers interest rates, causing short-run aggregate supply to shift to the right.

Select appropriate replacements for [a] and [b] in the following statement:

According to the purchasing power parity theory of exchange rates, if the domestic country'S [a] inflation rate decreases relative to its trading partners, then on foreign exchange markets [b].

a		[a]: trend; [b]: the domestic currency will appreciate over the trend.
b		[a]: trend; [b]: the domestic currency will depreciate over the trend.
c		[a]: cyclical; [b]: the domestic currency will appreciate when the domestic interest rate rises.
d		[a]: cyclical; [b]: the domestic currency will appreciate when the domestic interest rate falls.