In a floating exchange-rate system, government officials must intervene in the foreign exchange market to keep the exchange rate from fluctuating.

Which of the following statements about the importance of trade to the U.S. economy is false?

A) The U.S. economy is highly dependent on international trade for growth in its gross domestic product. B) Overall, about 20 percent of U.S. manufacturing jobs depend directly or indirectly on exports. C) The United States is the second largest exporter in the world. D) Since 1970, both exports and imports have steadily increased as a fraction of U.S. gross domestic product.

Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy may cause the demand for dollar to _____________ and the supply for dollar to __________

a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease