Which of the following situations will cause the supply of ...

[tatyanajohnson]

Which of the following situations will cause the supply of British pounds to rise in the foreign exchange market?
 a. The price level in the United States rises faster than the price level in the United Kingdom.
  b. The real GDP in the United States grows while the real GDP in the United Kingdom remains constant.
  c. The interest rate in the United Kingdom falls while the interest rate in the United States remains constant.
  d. The tax rate in the United States rises while the tax rate in the United Kingdom does not change.

Question 2

If prices in the United States fall relative to Japan, then the:
 a. Dollar depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise.
  b. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise.
  c. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan fall.
  d. Yen depreciates because U.S. imports from Japan rise, and U.S. exports to Japan fall.
  e. Change in the value of the dollar or yen is uncertain because exports and imports rise.

[flannelavenger]

Answer to Question 1

.C

Answer to Question 2

.B