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If US Interest Rates Suddenly Become Much Higher Than European Interest

Question 8

Multiple Choice

If U.S. interest rates suddenly become much higher than European interest rates (and if this does not cause concern about higher inflation in the United States) , the U.S. demand for euros would ____, and the supply of euros to be exchanged for dollars would ____, other factors held constant. ​


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

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