Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar.Today, the dollar is trading at 1.05 euros per dollar.The dollar has ________ and a possible reason for the change is ________ in the U.S.interest rate.
A) appreciated; an increase
B) appreciated; a decrease
C) depreciated; an increase
D) depreciated; a decrease
E) depreciated; because there has been no change
Correct Answer:
Verified
Q166: When the U.S.interest rate rises, the demand
Q167: The exchange rate can be very volatile,
Q168: In the long run, the exchange rate
Q169: When people expect that the future exchange
Q170: In the foreign exchange market, the exchange
Q172: An increase in the U.S.interest rate relative
Q173: If the expected future exchange rate decreases,
Q174: If the expected future U.S.exchange rate falls,
Q175: Purchasing power parity can be used as
A)
Q176: Purchasing power parity determines the exchange rate
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