If the U.S. interest rate rises while interest rates in the rest of the world do not change, the higher U.S. interest rate
A) decreases the demand for dollars.
B) increases the demand for dollars.
C) has no effect on the demand for dollars.
D) will stop all trading between the currencies of the U.S. and other countries.
Question 2
In the loanable funds market, if the interest rate is above the equilibrium level
A) there is a shortage of loanable funds.
B) there is a surplus of loanable funds.
C) expected profit falls.
D) government expenditure decreases.
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