Multiple Choice
If the risk of buying U.S.assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds,then
A) the real exchange rate and the interest rate will rise.
B) the real exchange rate will rise and the interest rate will fall.
C) the real exchange rate will fall and the interest rate will rise.
D) the real exchange rate and the interest rate will fall.
Correct Answer:
Verified
Correct Answer:
Verified
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