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If the Fed Hikes the U

Question 2

Multiple Choice

If the Fed hikes the U.S. interest rate relative to interest rates in other countries, in the foreign exchange market the demand for dollars will________ , the supply of dollars will ________, and the exchange rate will________ .


A) increase; increase; rise
B) increase; decrease; rise
C) decrease; decrease; fall
D) decrease; increase; fall

Correct Answer:

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