Author Question: How do changes in interest rates affect exchange rates? What will be an ideal ... (Read 91 times)

jeatrice

  • Hero Member
  • *****
  • Posts: 543
How do changes in interest rates affect exchange rates?
 
  What will be an ideal response?

Question 2

Special taxes levied on earnings for Social Security and Medicare are called
 
  A) an unfair tax on low-income families. B) an exception tax for corporations.
  C) a social insurance tax. D) a withholding tax on wages.


javimendoza7

  • Sr. Member
  • ****
  • Posts: 293
Answer to Question 1

Changes in interest rates affect the value of a country's currency vis--vis other currencies. When the interest rate in an economy increases, investors want to invest in the economy. This increases the demand for the domestic currency causing it to appreciate against other currencies in the foreign exchange market. On the other hand, when interest rate decreases in an economy, the country's currency depreciates.

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

jeatrice

  • Hero Member
  • *****
  • Posts: 543

javimendoza7

  • Sr. Member
  • ****
  • Posts: 293

 

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

Not getting enough sleep can greatly weaken the immune system. Lack of sleep makes you more likely to catch a cold, or more difficult to fight off an infection.

Did you know?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

For a complete list of videos, visit our video library