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S Interest Rates Suddenly Become Much Higher Than European Interest

Question 57

Multiple Choice

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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