If a nation’s interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?

Related Mcqs:

1. If a nation’s interest rates are relatively low compared to those of other countries. then the exchange value of its currency will tend to ?

   A. not be affected
   B. appreciate
   C. depreciate
   D. fluctuate more than if interest rates were high

2. Relatively low real interest rates in the United States tend to ?

   A. decrease the foreign demand for dollars causing the dollar to depreciate
   B. decrease the foreign demand for dollars causing the dollar to appreciate
   C. increase the foreign demand for dollars causing the dollar to depreciate
   D. decrease the foreign demand for dollars causing the dollar to appreciate

3. Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?

   A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
   B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
   C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
   D. decrease in the demand for foreign currency and increase in the supply of foreign currency and a appreciation in the dollar

4. Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?

   A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
   B. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
   C. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
   D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

5. The exchange rate is the ratio at which the currency of one country is exchanged for the currency of another. Which method was developed by the World bank to exchange rates ?

   A. Breton Wood method
   B. Free market exchange rate
   C. Atlas method of exchange rate
   D. Open market exchange rate

6. The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?

   A. price feedback theory
   B. trade feedback theory
   C. J-curve theory
   D. purchasing power parity theory

7. Under floating exchange rates, expectations of higher interest rates are likely to cause an ____ of the exchange rate?

   A. depreciation
   B. appreciation
   C. fall
   D. devaluation

8. Relatively high real interest rates in the United States tend to ?

   A. decrease the foreign demand for dollars causing the dollar to depreciate
   B. decrease the foreign demand for dollars causing the dollar to appreciate
   C. increase the foreign demand for dollars causing the dollar to depreciate
   D. increase the foreign demand for dollars causing the dollar to appreciate

9. The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

   A. Transactions motive
   B. precautionary motive
   C. profit motive
   D. speculation motive

10. If currency dealers expect the value of the pound to fall, the exchange value will tend to ?

    A. depreciate
    B. not be affected
    C. fluctuate more than it would do therwise
    D. appreciate