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Explain How the Following Will Affect the Relative Values of the Dollar

Question 142

Essay

Explain how the following will affect the relative values of the dollar and the English pound.
a.Income growth is higher in the United States than in England.
b.Inflation is higher in England than in the United States.
c.Real interest rates are higher in the United States than in England.

Correct Answer:

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a.The dollar will depreciate r...

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