585 #
© 2014 Pearson Canada Inc.#
____ in the domestic interest rate causes the demand for domestic assets to ____
and the domestic currency to appreciate, everything else held constant.
A) An increase; increase
B) An increase; decrease
C) A decrease; increase
D) A decrease; decrease
Answer: A
Diff: 1 Type: MC Page Ref: 479
Skill: Recall
Objective List: 19.4 Understand the factors that change the exchange rate
____ in the domestic interest rate causes the demand for domestic assets to shift to the
____ and the domestic currency to appreciate, everything else held constant.
A) An increase; right
B) An increase; left
C) A decrease; right
D) A decrease; left
Answer: A
Diff: 1 Type: MC Page Ref: 479
Skill: Recall
Objective List: 19.4 Understand the factors that change the exchange rate
____ in the domestic interest rate causes the demand for domestic assets to ____
and the domestic currency to depreciate, everything else held constant.
A) An increase; increase
B) An increase; decrease
C) A decrease; increase
D) A decrease; decrease
Answer: D
Diff: 1 Type: MC Page Ref: 479
Skill: Recall
Objective List: 19.4 Understand the factors that change the exchange rate
____ in the domestic interest rate causes the demand for domestic assets to shift to the
____ and the domestic currency to depreciate, everything else held constant.
A) An increase; right
B) An increase; left
C) A decrease; right
D) A decrease; left
Answer: D
Diff: 1 Type: MC Page Ref: 479
Skill: Recall
Objective List: 19.4 Understand the factors that change the exchange rate