Question : 41) When the U.S. interest rate differential ________, the demand : 1238293

41) When the U.S. interest rate differential ________, the demand for dollars ________ and the demand curve for dollars shifts rightward.

A) rises; decreases

B) rises; increases

C) falls; increases

D) falls; decreases

E) rises; does not change

42) If the U.S. interest rate rises relative to the interest rate in other countries, then the supply of dollars ________ and the demand for dollars ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

43) In the foreign exchange market, an increase in the supply of dollars could be the result of

A) an increase in the U.S. interest rate differential.

B) an increase in the expected future exchange rate.

C) a decrease in the U.S. interest rate differential.

D) an increase in the exchange rate.

E) a decrease in the exchange rate.

44) If the interest rate rises in the United States relative to other nations, then in the foreign exchange market the demand for dollars ________ and the supply of dollars ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

45) Suppose interest rates in foreign countries increase relative to the U.S. interest rate. As a result, there is ________ the demand curve for dollars.

A) an upward movement along

B) a downward movement along

C) a leftward shift of

D) a rightward shift of

E) neither a movement along nor a shift of

46) When the U.S. interest rate ________ relative to foreign interest rates, the supply of dollars ________ and the supply curve of dollars shifts rightward.

A) rises; decreases

B) rises; increases

C) falls; increases

D) falls; decreases

E) rises; does not change

47) If the U.S. interest rate differential decreases, then in the foreign exchange market the

A) quantity supplied of dollars decreases.

B) quantity supplied of dollars increases.

C) supply of dollars decreases.

D) supply of dollars increases.

E) demand for dollars increases.

48) ________ increases the supply of dollars in the foreign exchange market.

A) An increase in the exchange rate

B) A decrease in the exchange rate

C) A fall in the interest rate in the U.S. relative to the interest rate in other countries

D) A rise in the expected future exchange rate

E) A rise in the interest rate in the U.S. relative to the interest rate in other countries

49) If the U.S. interest rate differential decreases, then in the foreign exchange market the

A) quantity demanded of dollars decreases.

B) quantity demanded of dollars increases.

C) demand for dollars decreases.

D) demand for dollars increases.

E) supply of dollars decreases.

50) The ________ the expected future exchange rate, the greater is the expected profit from holding dollars and so the ________.

A) lower; supply curve of dollars shifts rightward

B) higher; demand curve for dollars shifts leftward

C) higher; demand curve for dollars shifts rightward

D) lower; demand curve for dollars shifts leftward

E) higher; supply curve of dollars shifts rightward