If the Federal Reserve raises the U.S. interest rate, foreigners'
A) demand for U.S. dollars will increase and the exchange rate will rise.
B) demand for U.S. dollars will decrease and the exchange rate will fall.
C) demand for U.S. dollars will increase and the exchange rate will fall.
D) demand for U.S. dollars will decrease and the exchange rate will rise.
A
You might also like to view...
If the exchange rate between the Chinese yuan and the U.S. dollar is 5 yuan for $1, then how much is each yuan worth in U.S. dollars?
a) $0.20 b) $1.50 c) $2 d) $5
A Giffen good is one for which the quantity demanded rises as the price rises because the income effect
a. reinforces the substitution effect. b. reinforces and is greater than the substitution effect. c. counteracts but is smaller than the substitution effect. d. counteracts and is greater than the substitution effect.