Suppose a British bank offers a 3 percent interest rate while a U.S. bank offers a 7 percent interest rate. People must expect the U.S. dollar will
A) depreciate 4 percent.
B) appreciate 4 percent.
C) appreciate 10 percent.
D) depreciate 10 percent.
Question 2
The neoclassical growth theory says, in part, that
A) a population explosion driven by economic growth will end economic growth.
B) technological change leads to economic growth.
C) the differences in nation's growth rates will persist indefinitely.
D) technology does not play a role in economic growth.
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