Assume that European interest rates fall as a result of decreased deficit spending by the governments of the European Union.We would expect all of the following, except:
A)a depreciation of the euro with respect to the U.S.dollar.
B)increased European demand for American government securities.
C)a higher level of U.S.imports from Europe.
D)higher U.S.net exports to Europe.
E)higher French exports to the United States.

Question

Quizplus · Accepted Answer

A fall in European interest rates would likely lead to a depreciation of the euro, making European goods cheaper and increasing U.S. imports from Europe, while reducing U.S. exports to Europe.

Assume That European Interest Rates Fall as a Result of Decreased