Author Question: If the euro per dollar exchange rate changes from 1 = 0.8 euros to 1 = 0.7 euros, it implies that ... (Read 122 times)

j.rubin · **on:** Jun 30, 2018

If the euro per dollar exchange rate changes from 1 = 0.8 euros to 1 = 0.7 euros, it implies that the euro has depreciated against the dollar.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Which of the following is true?
a. When real interest rates are higher in country A than country B there will tend to be a capital flow from country B to country A.
b. When real interest rates are higher in country A than country B there will tend to be a capital flow from country A to country B.
c. Capital flows will tend to increase real interest rates in countries with a capital inflow.
d. Both b. and c. are correct.