An increase in US real interest rates relative to the rest of the world can be expected to
a. encourage investment spending by US firms in the US
b. decrase the capital flow into the US
c. cause a net outflow of foreign captial from the US
d. increase the international value of the dollar
e. improve the situation for exporters
Answer: d. increase the international value of the dollar
You might also like to view...
The money multiplier is used to determine how much the
A) quantity of money increases when the monetary base increases. B) monetary base increases when the quantity of money increases. C) monetary base increases when the Fed purchases government securities. D) monetary base increases when the Fed sells government securities. E) quantity of money increases when the required reserve ratio increases.
Protectionist policies:
A) restrict the importation of foreign goods and services. B) shift the supply curves for the protected goods and services to the right in the country imposing the restriction. C) generally result in increased benefits in the long run in all countries. D) are no longer advocated by powerful interests.