Assume that the income levels in U.K. start to rise, while U.S. income levels remain unchanged. This will place ____ pressure on the value of British pound. Also, assume that U.S. interest rates rise, while the British pound remains unchanged. This will place ____ pressure on the value of British pound.
If a country experiences an increase in interest rates relative to U.S. interest rates, the inflow of U.S. funds to purchase its securities should ____, the outflow of its funds to purchase U.S. securities should ____, and there is ____ pressure on its currency's equilibrium value.
increase; decrease; downward
decrease; increase; upward
increase; decrease; upward
decrease; increase; downward
increase; increase; upward
Assume that the U.S. places a strict quota on goods imported from Chile and that Chile does not retaliate. Holding other factors constant, this event should immediately cause the U.S. demand for Chilean pesos to ____ and the value of the peso to ____.
When the "real" interest rate is relatively low in a given country, then the currency of that country is typically expected to be:
weak, since the country's quoted interest rate would be high relative to the inflation rate.
strong, since the country's quoted interest rate would be low relative to the inflation rate.
strong, since the country's quoted interest rate would be high relative to the inflation rate.
weak, since the country's quoted interest rate would be low relative to the inflation rate.
The phrase "the dollar was mixed in trading" means that:
the dollar was strong in some periods and weak in other periods over the last month.
the volume of trading was very high in some periods and low in other periods.
the dollar was involved in some currency transactions, but not others.
the dollar strengthened against some currencies and weakened against others.
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