Multiple Choice
Under a flexible exchange rate system, which of the following will be most likely to cause an appreciation in the exchange rate of the dollar relative to the English pound?
A) an economic boom in England, inducing English consumers to buy more American-made automobiles, trucks, and computer products
B) higher real interest rates in England
C) inflation in the United States while prices are stable in England
D) attractive investment opportunities in England, inducing U.S. investors to buy stock in English firms
Correct Answer:
Verified
Correct Answer:
Verified
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