the economics of money, banking, and financial markets

584 #

© 2014 Pearson Canada Inc.#

9. 
   

   ____ in the domestic interest rate causes the demand for domestic assets to increase and
   the domestic currency to ____, everything else held constant.
   A) An increase; appreciate
   B) An increase; depreciate
   C) A decrease; appreciate
   D) A decrease; depreciate
   Answer: A
   Diff: 1 Type: MC Page Ref: 479
   Skill: Recall
   Objective List: 19.4 Understand the factors that change the exchange rate

   
   


10. 
    

    ____ in the domestic interest rate causes the demand for domestic assets to shift to the
    right and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A decrease; depreciate
    Answer: A
    Diff: 1 Type: MC Page Ref: 479
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate

    
    


11. 
    

    ____ in the domestic interest rate causes the demand for domestic assets to decrease and
    the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A decrease; depreciate
    Answer: D
    Diff: 1 Type: MC Page Ref: 479
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate

    
    


12. 
    

    ____ in the domestic interest rate causes the demand for domestic assets to shift to the
    left and the domestic currency to ____, everything else held constant.
    A) An increase; appreciate
    B) An increase; depreciate
    C) A decrease; appreciate
    D) A decrease; depreciate
    Answer: D
    Diff: 1 Type: MC Page Ref: 479
    Skill: Recall
    Objective List: 19.4 Understand the factors that change the exchange rate