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Figure 10-6 -Refer to Figure 10-6. an Increase in U.S. Interest Rates

Question 105

Multiple Choice

Figure 10-6
-Refer to Figure 10-6. An increase in U.S. interest rates would

A) decrease the demand for U.S. dollars, increase the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .
B) decrease the demand for U.S. dollars, decrease the exchange rate, and lead to an increase in net exports. The results of such a policy are represented in Panel (a) .
C) increase the demand for U.S. dollars, increase the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .
D) increase the demand for U.S. dollars, decrease the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .

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