Ceteris paribus, an increase in the U.S. interest rate relative to interest rates abroad should result...
Ceteris paribus, an increase in the U.S. interest rate relative to interest rates abroad should result in a:
Multiple Choice
-
None of the options.
-
weaker dollar.
-
lower spot exchange rate expressed in European terms.
-
stronger dollar and a lower spot exchange rate expressed in European terms.
-
a stronger dollar.
Homework Answers
The answer is
-
weaker dollar.
As per interest rate parity, increase in interest rate in one country is offset by decrease in value of its currency
Hence, it will lead to weaker Dollar
Add Answer to:
Ceteris paribus, an increase in the U.S. interest rate relative
to interest rates abroad should result...
Suppose that interest rates in the U.S. increase relative to interest rates in Great Britain. This...
Suppose that interest rates in the U.S. increase relative to interest rates in Great Britain. This is matched by an equivalent depreciation of the USD against the GBP. Other things being equal: Multiple Choice None of the options. the U.S. current account with the UK will deteriorate. UK investment capital will flow into the U.S. the UK current account with the U.S. will improve. UK investment capital will flow out of the U.S.
If the interest rate in the U.S. is expected to be 5 percent for the next...
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1. An increase in Canada's interest rates relative to US interest rates should A. encourage more Canadians...
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Exchange Rates The chart below shows the exchange rate between the U.S. dollar and the Mexican...
Exchange Rates
The chart below shows the exchange rate between the U.S. dollar
and the Mexican peso in 2015 and 2016. In these questions we’ll
focus on changes in 2015. Note that the chart
shows the exchange rate in terms of pesos per
dollar.
Suppose a meal at a restaurant in Mexico City cost 90
pesos in 2015. Read approximate figures from
the chart for the exchange rate in January 2015 and January 2016,
and use those figures to answer the following...
50. Ceteris paribus, the total demand for money curve will increase (shift rightward): A. if interest...
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The spot exchange rate is S(¥120/$1). The U.S. interest rate is 4 percent APR. The Japanese...
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The spot exchange rate is S(X120/$1). The U.S. Interest rate is 4 percent APR. The Japanese...
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QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate...
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The one-year interest rate in Germany 3.0 percent. The spot exchange rate is $1.20/€ and the...
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If the interest rate in the U.S. is expected to be 5 percent for the next year. The interest rate in the U.K. is expected to be 8 percent for the next year. Uncovered IRP suggests that the: Multiple Choice O U.S. dollar should depreciate against the pound by about 3 percent. O British pound should depreciate against the dollar and the dollar should appreciate against the pound, both by about 3 percent O British pound is should appreciate against...
Exchange Rates
The chart below shows the exchange rate between the U.S. dollar
and the Mexican peso in 2015 and 2016. In these questions we’ll
focus on changes in 2015. Note that the chart
shows the exchange rate in terms of pesos per
dollar.
Suppose a meal at a restaurant in Mexico City cost 90
pesos in 2015. Read approximate figures from
the chart for the exchange rate in January 2015 and January 2016,
and use those figures to answer the following...
50. Ceteris paribus, the total demand for money curve will increase (shift rightward): A. if interest rates increase. B. if nominal GDP decreases. C. if the price level decreases. D. if nominal GDP increases. 51. Ceteris paribus, the total demand for money curve will decrease (shift leftward): A. if interest rates increase. B. if nominal GDP decreases. C. if the price level increases. D. if nominal GDP increases. 52. Which of the following is correct? A. The asset (speculative) demand...
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