For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?

Related Mcqs:

Relatively high real interest rates in the United States tend to ?

A. decrease the foreign demand for dollars causing the dollar to depreciate B. decrease the foreign demand for dollars causing the dollar to appreciate C. increase the foreign demand for dollars causing the dollar to depreciate D. increase the foreign demand for dollars causing the dollar to appreciate...

When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?

A. an excess demand for that currency exists in the foreign exchange market B. an excess supply of the currency exists in the foreign exchange market C. the demand for foreign exchange shifts outward to the right D. the demand for foreign exchange shifts backward to the left...

Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?

A. appreciate by 8 percent against the yen B. depreciate by 8 percent against the yen C. remain at its existing exchange rate None of the above...

IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?

A. $50 per pound B. $1.00 per pound C. $2.00 per pound D. $8.00 per pound...

Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?

A. the Canadian current account balance is in surplus B. the Swiss current account balance is in deficit C. the Canadian current account balance is in equilibrium D. the Swiss current account balance is in equilibrium...