Borrowers and lenders make transactions based on the A) ...

[karlynnae]

Borrowers and lenders make transactions based on the
 
  A) expected real interest rate less the expected rate of inflation.
  B) real interest rate.
  C) expected real interest rate.
  D) expected nominal interest rate.

Question 2

Everything else equal, if the dollar appreciates against the peso:
 
  A) U.S. will export more to Mexico and will import less from Mexico.
  B) U.S. exports to Mexico and imports from Mexico will decrease.
  C) U.S. exports to Mexico and imports from Mexico will increase.
  D) U.S. will import more from Mexico and will export less to Mexico.

[ASDFGJLO]

Answer to Question 1

C

Answer to Question 2

D

[karlynnae]

YES! Correct, THANKS for helping me on my review

[kswal303]

Gracias!