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A ) International Value of the Dollar Increase; Exports Increase

1. If lowered United States interest rates cause foreign demand for the dollar to decrease, which of the following will occur to the international value of the dollar and to United States exports?. A ) International Value of the Dollar Increase; Exports Increase

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A ) International Value of the Dollar Increase; Exports Increase

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  1. 1. If lowered United States interest rates cause foreign demand for the dollar to decrease, which of the following will occur to the international value of the dollar and to United States exports? • A) International Value of the Dollar Increase; Exports Increase • B) International Value of the Dollar Increase; Exports Decrease • C) International Value of the Dollar Increase; Exports No change • D) International Value of the Dollar Decrease; Exports Increase • E) International Value of the Dollar Decrease; Exports Decrease

  2. 1. If lowered United States interest rates cause foreign demand for the dollar to decrease, which of the following will occur to the international value of the dollar and to United States exports? • D) International Value of the Dollar Decrease; Exports Increase

  3. 2. In a flexible system of exchange rates, an open market sale of bonds by the Federal Reserve will most likely change the money supply, the interest rate, and the value of the United States dollar in which of the following ways? • A) Money Supply--Increase; Interest rate--Decrease; Value of the Dollar—Decrease • B) Money Supply--Increase; Interest rate--Decrease; Value of the Dollar--Increase • C) Money Supply--Decrease; Interest rate--Decrease; Value of the Dollar--Increase • D) Money Supply--Decrease; Interest rate--Increase; Value of the Dollar--Increase • E) Money Supply--Decrease; Interest rate--Increase; Value of the Dollar--Decrease

  4. 2. In a flexible system of exchange rates, an open market sale of bonds by the Federal Reserve will most likely change the money supply, the interest rate, and the value of the United States dollar in which of the following ways? • D) Money Supply--Decrease; Interest rate--Increase; Value of the Dollar--Increase

  5. 3. If other things are held constant, an increase in United States exports will • A) tend to cause the dollar to appreciate because the world supply of dollars will rise • B) tend to cause the dollar to appreciate because the world demand for dollars will rise • C) have no effect on the exchange rate for the dollar because exports will also increase • D) tend to cause the dollar to depreciate because the world supply of dollars will rise • E) tend to cause the dollar to depreciate because the world demand for dollars will rise

  6. 3. If other things are held constant, an increase in United States exports will • B) tend to cause the dollar to appreciate because the world demand for dollars will rise

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