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Other Things the Same, Which of the Following Would Cause

Question 90

Multiple Choice

Other things the same, which of the following would cause the real exchange rate to rise?


A) Both an increase in the real interest rate and an increase in foreign demand for U.S.goods and services.
B) An increase in the real interest rate, but not an increase in foreign demand for U.S.goods and services.
C) An increase in foreign demand for U.S.goods and service, but not an increase in the U.S.real interest rate.
D) Neither an increase in the U.S.real interest rate nor an increase in the demand for U.S.goods and services.

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